Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — TRADE AND INDUSTRY

Telecommunications

Mr. McAvoy: To ask the Secretary of State for Trade and Industry what representations he has received about the telecommunications duopoly.

The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Peter Lilley): I have received more than 190 written responses to the consultative document on competition and choice in telecommunications. The vast majority firmly supported the document's main proposals.

Mr. McAvoy: Is the Secretary of State aware that the 14 January deadline for submissions on the Government's consultation document has caused great consternation in the industry? Is two months long enough for comments on a document which proposes such fundamental changes to one of our most important industries—changes which the Government have considered for seven years?

Mr. Lilley: The hon. Gentleman is right that everyone had seven years' notice of the consultation. Forty companies made representations before I even published the consultation document. Six of the 190 companies made representations after the 14 January deadline and we shall do our best to consider any late representations.

Dr. Hampson: Will my right hon. Friend think twice about proposals to allow British Telecom to deliver entertainment services to households? Those of us who want massive investment in cabling in Britain fear that that might be a threat by British Telecom to deter investment in the cable industry.

Mr. Lilley: I shall, of course, consider very carefully my hon. Friend's remarks and the other representations on that issue that I have received as a result of the consultation process. The considerations that my hon. Friend mentioned are those which originally led me to make the proposal in the consultative document.

Mr. Henderson: When will the Secretary of State be able to respond to the representations that he received in relation to the consultative paper? Does he agree with British Telecom that there can be no effective competition without firm regulation on matters such as the price of access of potential competitors to the BT network? Will the Secretary of State modify the proposals in his consultative paper to ensure that there is effective

regulation to protect the public interest and to protect a competitive environment, high technical standards, proper research and development and capital investment in the local loop?

Mr. Lilley: I cannot give the hon. Gentleman a firm date by which the conclusions will have been reached. I shall endeavour to do so as rapidly as is compatible with proper consideration of the representations. I do not want an unnecessarily long period of uncertainty. I agree that regulation is necessary, although competition is desirable. Under the previous arrangements for a nationalised industry with which the Labour Government were satisfied, there was no regulator. In the words of the Fabian Society, the nationalised industry was left to regulate itself. We prefer a privatised industry but a firrn regulatory authority and that is what we have.

Mr. Ian Bruce: Will my right hon. Friend assure the House that when he considers the representations he will give greater weight—or at least equal weight—to the representations of user gorups and individual customers than to those of the massive formerly nationalised industry, which now puts so much pressure on the Government to stop free competition? Will equal access be speeded up so that more people can get into the telecommunications market and therefore force prices down through competition?

Mr. Lilley: My hon. Friend makes a very good point. The consumer interest must and will be paramount. We place great emphasis on competition because that is the best way of ensuring the consumer interest, although, in some areas, as I said, regulation is essential to reinforce it With regard to my hon. Friend's point about equal access, I shall consider the responses to the proposal that I made in the document.

Imports

Mr. Allen McKay: To ask the Secretary of State for Trade and Industry what plans he has to reduce import penetration.

The Minister for Trade (Mr. Tim Sainsbury): The Department's policies aim to foster the competitiveness of British industry.

Mr. McKay: Is the Minister aware that, since 1979, import penetration in manufacturing industry has increased by 10 per cent., in chemicals by 12 per cent., in electronics by 21 per cent. and in computer and office equipment by 92 per cent? When will the Minister stop giving bland answers and support manufactures and manufacturing industry? Does he agree that on Friday our balance of payments deficit will be in excess of £15 billion?

Mr. Sainsbury: Import penetration is a feature of advanced economies. Indeed, on the basis of OECD statistics, import penetration in the United Kingdom is a little less than that in Germany, which would imply that we are on a fairly level playing field.

Sir John Stokes: Is my hon. Friend aware that I represent a seat which is thoroughly concerned with manufacturing industry and that the vast majority of my constituents agree with me that the only way to beat


import penetration is for British industry to make products that can be sold successfully throughout the world?

Mr. Sainsbury: As so often, my hon. Friend is absolutely right. I congratulate British manufacturing industry on the great increase in productivity and exports that it achieved in the 1980s.

Mr. Beggs: Is the Minister aware that a United Kingdom company that has supplied a proven product to United Kingdom ambulance services for the past four years has been excluded from a contract valued at £3·8 million? That contract was awarded in favour of an overseas competitor. Does the Minister agree that all Government Departments and those who spend public money must support our manufacturing industry and, when possible, award contracts to British companies? Will he seek the support of the Secretary of State for Health and hold an inquiry into how that contract has been awarded and, if possible, have it suspended during reappraisal?

Mr. Sainsbury: I am glad to be able to reasure the hon. Gentleman that more than 90 per cent. of the goods and services bought by the Government are from United Kingdom sources. Of course, the Government, as a purchaser, are looking to give the best possible value to the taxpayer.
The contract to which the hon. Gentleman refers is a matter for my right hon. Friend the Secretary of State for Health. Perhaps the hon. Gentleman would like to write to him about it.

Mr. Colin Shepherd: As a manufacturer involved in the manufacturing of consumer goods, does my hon. Friend agree that the bottom line is that the consumer should want to buy English or British produce because it is more attractive in terms of price and design? At the end of the day that is what manufacturing industry in this country must achieve if we are to reverse import penetration.

Mr. Sainsbury: My hon. Friend is absolutely right. I am glad that he mentions design as an important feature for a successful manufacturer and, of course, good service to the customer is also important. Being close to the market can be a great advantage to British manufacturers.

Manufacturing Industry

Mr. Robert Hughes: To ask the Secretary of State for Trade and Industry when he next expects to meet the president of the CBI to discuss manufacturing industry.

The Minister for Corporate Affairs (Mr. John Redwood): Ministers and officials from the Department of Trade and Industry regularly meet representatives of the Confederation of British Industry. Last week I met CBI representatives on two occasions, once to discuss wider ownership and once to hear their views on pay and productivity.

Mr. Hughes: With high interest rates costing industry £30 billion a year, with investment falling, with output down for each of the past seven months and with manufacturing redundancies running at 1,500 a week, is not it now time for the Government to take up the call of the right hon. Member for Henley (Mr. Heseltine) in his

leadership election manifesto for a more interventionist policy by the Government to save manufacturing industry from extinction?

Mr. Redwood: The adjustment to get down inflation has some costs. The CBI itself asked for membership of the exchange rate mechanism and the Government have adopted that discipline. It is very important, as the CBI is now telling its membership, for higher productivity that the adjustments should take place. There are many market opportunities and big export opportunities. Manufacturing exports are at record levels and there are many opportunities for import substitution. Many good companies in British industry are now addressing those matters to offer jobs and prosperity.

Mr. Nicholas Winterton: Does my hon. Friend accept that the decline in our manufacturing industry has directly led to our economy becoming extremely vulnerable? Does he further accept that the level of interest rates and the level at which we entered the exchange rate mechanism continue to contribute to the undermining of our manufacturing industry? Will he accept from me the sad news that several leading United Kingdom manufacturers in high technology are considering locating manufacturing plants in other countries in the European Community where the economic climate is much more advantageous?

Mr. Redwood: There are many fine companies and industries in our manufacturing sector. They are doing much better than they did under Labour in the 1970s and they will continue to do so. The aerospace, pharmaceutical and motor car industries are finding many new opportunities. I welcome the great expansion in the motor car industry where output is running at about 1·3 million cars per annum compared with a low point of only 900,000 cars less than 10 years ago. That is welcome progress. Of course, the Government want the adjustment to a low-inflation, high-productivity economy to occur rapidly. The sooner that that adjustment takes place, the greater the success will be.

Mr. Alex Carlile: Does the Minister share the concern felt by many that manufacturing output and investment are collapsing much more quickly than the Government predicted? Does he agree that that is partly due to the corporation tax system and its non-neutrality with regard to inflation? Will he and his colleagues urge the Chancellor of the Exchequer to reform the corporation tax system, for example, by increasing investment allowances to 40 per cent?

Mr. Redwood: Corporation tax policy is a matter for the Treasury, not the Department of Trade and Industry. However, the hon. and learned Gentleman should know that corporation tax in Britain is one of the lowest in the free enterprise world. It is welcome that the tax burden is proportionately lower here. That may be a contributory factor to the large amount of inward investment which Britain has attracted in recent years. Many overseas countries and companies recognise that Britain is the place in which to invest and we intend to encourage such investment further.

Mr. Devlin: Does my hon. Friend agree that today's refusal by the Monopolies and Mergers Commission to allow the takeover of ICI Agricultural Chemicals by Kemira has come much too late? Does he agree that if it


had turned down Kemira's earlier bid for Fisons and if his Department had prevented that nationalised company from undercutting and wrecking the market in agricultural chemicals, many of my constituents would not face the prospect of unemployment as a result of today's announcement?

Mr. Redwood: I hope that ICI finds some other solution for its agrochemical business, if there is a commercial and industrial way of doing so, because I want those jobs to be preserved. The MMC findings illustrate the wisdom of my right hon. Friend the Secretary of State when, as a matter of policy, he drew the attention of the MMC to the possibility that bids from nationalised industries could be more damaging and less fair than other bids. In its two reports published today, the MMC illustrated that that can be the case. In the case that my hon. Friend mentioned it found against the deal partly because of anxieties about the conduct of nationalised companies. The Government are determined to see fair play in markets. Part of that fair play must be to make sure that nationalised companies do not abuse their position in capital, product or service markets to the detriment of British jobs and industry.

Mr. Gordon Brown: But with manufacturing output down by £2 billion, manufacturing investment down 4 per cent., 100 companies going bankrupt every day and unemployment rising faster than anywhere else in western Europe, are not the Government, who began by provoking a manufacturing recession, causing yet another such recession far more severe than Ministers are prepared to admit? Is not it time that the Secretary of State for Trade and Industry, not just a junior Minister, spoke up for the needs of industry, ended the self-satisfied complacency and argued the case in Government, first, for a cut in interest rates and, secondly, for a budget for investment in industry?

Mr. Redwood: My right hon. Friend speaks up well for British industry and is a great ally and friend of it. British industry is flourishing considerably more under this Government than it ever did under the Labour Government. Output in manufacturing is up, whereas it used to fall under the Labour Government, and our unemployment is considerably below the European average. Whenever something is adverse in comparison with Europe we hear about it all the time from Opposition Members, but that is not the case on unemployment because they know that we have a much better record than do some of our European partners.
Last year, more new companies were created than fell on hard times. There was an extremely satisfactory rate of new company formation last year and we welcomed it as a sign of a flourishing enterprise economy.

Mrs. Maureen Hicks: Is not it a credit to the increased efficiency of the British motor manufacturing industry—I pay particular credit to Rover in the west midlands—that, despite a decline in United Kingdom car sales, the export of British cars has been tremendous? That is largely due to the fact that we have achieved increased efficiency. As a result of the 44·7 per cent. increase in car exports those companies are now working to full capacity.

Mr. Redwood: My hon. Friend makes her point extremely well. The British Government are extremely proud of the British motor industry and are proud of all those companies investing and located here. They have

made great strides in improving the quality and performance of their products. They now have a number of world-beating products that will continue to go from strength to strength on world markets.
The latest figures for the export of motor cars are heartening. They show that the British economy can flourish based upon more exports to overseas markets where there are good opportunities for growth and based upon import substitution as, once again, British people back British products because they are well made and good.

Trade (Germany)

Mr. Skinner: To ask the Secretary of State for Trade and Industry what are the latest trade figures between Britain and Germany; and if he will make a statement.

Mr. Sainsbury: In the first 11 months of 1990, United Kingdom visible exports to Germany were valued at £12 billion; imports from Germany were £18·5 billion. Compared with the similar period in 1989, exports are up by 18·5 per cent., while imports are virtually unchanged..

Mr. Skinner: Why does not the Minister have the guts to tell us what the deficit was in 1979? Is he aware that the deficit between Britain and Germany was £1·6 billion when the Tories took over and that when the Government announce the figures on Friday, it will be £7·1 billion? No wonder the Germans told the Governor of the Bank of England to get lost yesterday. Is not it a sad reflection on this country that, after 1945 when everyone was throwing their caps in the air, the Government are now going cap in hand to the Germans? We know who the top dogs are now.

Mr. Sainsbury: It appears that the hon. Gentleman has some reservations about the Government's economic policy. I should like to hear him pay tribute to the success of those parts of our industry that are exporting to Germany so effectively. Clothing industry exports have gone up 40 per cent. and medical and pharmaceutical exports are up 41 per cent. in the first II months of this year.

Mr. William Powell: Is my hon. Friend aware that there are immense opportunities for British companies in the former Soviet sector of Germany, now eastern Germany, particularly for the infrastructural industries of transport, telecommunications energy and water? Will my hon. Friend use the full resources of his Department to draw those opportunities for trade and investment to the attention of British companies?

Mr. Sainsbury: I very much agree with my hon. Friend. He will be aware that an extremely successful seminar was held last week, jointly sponsored by my Department and the CBI, with the Treuhandanstalt. That seminar drew the attention of British industries to investment and trade opportunities with the former East German territories.

Mr. Hoyle: But in relation to the deficit with Germany does the Minister ever go out and talk to manufacturers? If he does, what have they told him about going into the ERM at 2·9—almost 3—deutschmarks to the pound? [HON. MEMBERS: "You wanted it."' We did not want it at that figure. Those manufacturers would tell the Minister that it is not possible to be competitive at that rate. What is the Minister and the miserable team that he has round


him doing about that? I know that none of them has any experience of industry—the Minister for Trade was kept in the back office of the family firm. The Minister and his team should at least get out and, in the words of the former Prime Minister, back British industry, and tell the Treasury that it was wrong.

Mr. Sainsbury: I assure the hon. Gentleman that I make it my purpose to have contacts with industry nearly as close as those which I had when I spent 20 years in industry. I also assure the hon. Gentleman that, although it is sometimes suggested that a lower exchange rate would be helpful for exports, I frequently hear it suggested that a stable exchange rate and lower inflation are much more to be welcomed.

Manufacturing Output

Mr. Harry Greenway: To ask the Secretary of State for Trade and Industry what was the level of manufacturing output for the past year; what was the level in previous years; and if he will make a statement.

The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Edward Leigh): Figures for manufacturing output are not yet available for the whole of 1990. Provisional estimates show that manufacturing output in the first 11 months of 1990 averaged 1190, based upon 1985 equal to 100, similar to the record annual level of 1989.

Mr. Greenway: Will my hon. Friend confirm that the volume of manufacturing output increased by 8·5 per cent. during the first 11 months of 1990? Does my hon. Friend agree that that would not have happened had not our industry been made much more competitive as a result of the transformation achieved by the Government over the past 11 years—in terms of competitiveness and everything else?

Mr. Leigh: My hon. Friend is right to draw attention to the transformation of British industry in the last decade. Output, productivity, exports and investment are all well above their 1980 levels and exports are at a record level.

Mr. Tom Clarke: Does the Minister agree that the steelworkers of Lanarkshire are only too willing to contribute to British manufacturing output—in particular the men of Ravenscraig, Clydesdale, Dalzell and Imperial who are losing their jobs? The Minister for Corporate Affairs tells people to buy British. When will he tell that to British Steel?

Mr. Leigh: The prospects for British Steel have been transformed under this Government. Losses running into £1 billion in 1979, under the Labour Government, have been tranformed into profits of more than £600 million now. Opposition Members like to pose as friends of manufacturing industry. It is interesting that when they were last able to act on that friendship, manufacturing output fell.

GATT

Mr. Lester: To ask the Secretary of State for Trade and Industry if he will make a statement on the progress of the Uruguay round of the GATT.

Mr. Brandon-Bravo: To ask the Secretary of State for Trade and Industry if he will make a statement on the likely results of a successful completion of the GATT negotiations.

Mr. Lilley: We continue to press for the early resumption of talks, as a successful Uruguay round would include fully for the first time agriculture, services, textiles, intellectual property and investment as well as significant reductions in tariffs, quotas and other barriers and improvements in disciplines and safeguards. Such an outcome would be highly beneficial for the United Kingdom and would provide a much-needed noninflationary stimulus to the world economy. Failure would mean a return to protectionism, trade wars and beggar-my-neighbour policies.

Mr. Lester: My right hon. Friend continues to press for a settlement of the Uruguay round. Although the House is now concentrating on the Gulf war, many of us are still concerned that the GATT round remains unresolved. Will my right hon. Friend confirm that the United States estimates that, by the end of the decade, non-inflationary growth in the world will amount to about $4 trillion? That would be of particular benefit not only to the United Kingdom but to many developing countries about which many of us are still deeply concerned.

Mr. Lilley: My hon. Friend is absolutely right. The United States has estimated that, in terms of reductions in tariffs alone, a successful round would produce an extra $4 trillion of income in the world by the end of the century. My hon. Friend is also absolutely right to point out the importance to third-world countries of a successful outcome to the Uruguay round as those countries, more than any others, need an open and buoyant world trading environment.

Mr. Brandon-Bravo: My right hon. Friend will know that, before coming to this place, I spent my life in textiles and that I therefore have a deep interest in the outcome of GATT and in its effects on the multi-fibre arrangement and the textile industry. If there is a gap between agreement on GATT and the phasing out of the MFA, a dreadful vacuum will be created. Can my right hon. Friend reassure the textile industry about what he might do if such a vacuum were created?

Mr. Lilley: My hon. Friend is right to emphasise the importance for the textile industry, in his constituency and more widely, of a successful outcome to the round. Failure to agree would mean that the existing multi-fibre arrangement would lapse in July of this year. That would be unacceptable to us, to the industry and to the world and would lead to the necessity for other arrangements. It would be better by far to have a successful conclusion to the GATT round by the target date of 1 March.

Mr. James Lamond: Will the Secretary of State ensure that his remarks are conveyed to those negotiating on our behalf? He must have received the same anguished letters as we have from manufacturers who say that unless the GATT regulations are strengthened and enforced, doing away with the MFA will bring further problems for the textile industry, which is already very weak.

Mr. Lilley: The hon. Gentleman makes a good point. The embryonic agreement on textiles which would be available if we conclude the whole GATT round would


result in a transitional phasing out of the MFA over 10 years, which would be more acceptable than its precipitate ending in July. We have done all in our power—and I continue to consult colleagues in the European Community, as well as in other countries with whom we established close relationships during the Brussels week of negotiations—to urge an early resumption of talks.

Mrs. Margaret Ewing: Can the Secretary of State tell us whether the Government are bringing forward specific proposals which might lead to the resumption of the talks, which are vital to all who represent constituencies not only with textile interests, where we see redundancy after redundancy, but with agricultural interests which are important to the rural community?

Mr. Lilley: The GATT negotiations are carried out by the European Commission on behalf of member states, so it is essential that the Commission should use its negotiating power to the full and that it should seek to get back to the negotiating table as rapidly as possible. We have pressed for that within the Community, as is widely recognised.

Mr. Dickens: I am afraid that I cannot speak with great volume today. The hon. Member for Oldham, Central and Royton (Mr. Lamond) was right in his plea for the textile industry in the north-west. The round of negotiations is critical for thousands of textile workers in the area. I implore my right hon. Friend to make sure that he gets it right.

Mr. Lilley: I never thought that I would have difficulty in hearing my hon. Friend. I entirely endorse his message that the industry is of great importance to the north-west. We are very concerned to ensure a proper settlement within GATT. There is the basis of an agreement which would be satisfactory, I think, to the textile industry; certainly it would be much more satisfactory than failure to agree.

Ms. Quin: Has the Secretary of State seen the widespread criticism in the press of the Government's stance on agriculture within the European Community? Is he aware that agriculture accounts for 1·5 per cent. of our GDP while manufacturing, construction and financial services account for over 50 per cent? Surely the Government can find ways to help agriculture that do not put in jeopardy the major part of the economy.

Mr. Lilley: I have not seen the widespread criticism. I recall the last Labour Prime Minister's son-in-law describing me as the hero of the GATT negotiations, but I do not think that that is what the hon. Lady was referring to. I have done all in my power, as have the whole Government, to bring about a successful conclusion to the talks, including success on the agricultural front.

Lloyd's

Mrs. Gorman: To ask the Secretary of State for Trade and Industry if he has any plans to review the self-regulation of Lloyd's of London.

Mr. Redwood: The Neill committee in 1986 reviewed regulation at Lloyd's thoroughly. Its 70 recommendations have been implemented in full and I think that the new system now requires a period of stability.

Mrs. Gorman: I thank my hon. Friend for that reply. He must be aware of the disquiet felt by people who are in dispute with Lloyd's because there is no form of independent appeals procedure. Will he express concern for my constituent, Mr. Cawen, who, after 25 years of exemplary service at Lloyd's, has been disbarred on a technical matter which would not occasion any form of prosecution in a court of law? Is my hon. Friend also aware that the United States Congress has expressed grave concern about the way in which Lloyd's is regulated? Will he therefore give an assurance that people in dispute with Lloyd's can look forward to a truly independent appeals system?

Mr. Redwood: There is an appeals system within Lloyd's and a large number of independent members are involved in regulation at Lloyd's—indeed, they are in a majority. If my hon. Friend would like to pursue the case of her constituent, Lloyd's would be prepared to talk to her about it, if she has her constituent's consent in so doing—

Mrs. Gorman: indicated dissent.

Mr. Redwood: I am telling the House today that I think that Lloyd's would be prepared to discuss the case with my hon. Friend if her constituent authorises her so to do. She is also welcome to come and see me about the matter, but regulation is for Lloyd's which has a system of regulation established under statute, and independence is an important characteristic in the appeals procedure.

Ms. Mowlam: Is the Minister really as satisfied with the system at Lloyd's as his remarks just now seemed to suggest? Not only are there internal problems, as the horn. Member for Billericay (Mrs. Gorman) pointed out—she has tried to talk to Lloyd's, but the response from Lloyd's has been negative and the Minister's response unacceptable—but there are difficulties at Howden and, as the Minister is aware, a record number of years of books are outstanding at Lloyd's. Is that what the Minister regards as regulation working?

Mr. Redwood: The new system at Lloyd's is much tougher than the old one. The recommendations are wide ranging, as the hon. Lady would know if she had done her homework. That system is now tackling the problems that arose before 1986 and the fundamental review. It is ridiculous for the hon. Lady to describe my reply as unacceptable when I have told my hon. Friend the Member for Billericay (Mrs. Gorman) that she can talk to me about the case in question and also to Lloyd's. What more can a Minister do than offer to talk through a particular case and to see whether Lloyd's can provide satisfactory answers for my hon. Friend, who needs to know both sides of the story?

Postal Services

Mr. Barry Field: To ask the Secretary of State for Trade and Industry when he next intends to meet the chairman of the royal mail to discuss the quality of postal services in the United Kingdom.

Mr. Leigh: My right hon. Friend the Secretary of State meets the chairman of the Post Office, Sir Bryan Nicholson, regularly to discuss various matters of mutual interest.

Mr. Field: Is my hon. Friend aware that some post offices have run out of forces air mail letters? Will he promise to look into that shortage? Does he agree that the Post Office is doing an admirable job and playing a proper part in maintaining the morale of the forces in the Gulf, and none more so than the sub-post offices in our rural communities? Will he therefore ensure that those offices can compete on equal terms with Crown post offices in future?

Mr. Leigh: On the latter point, we have received assurances from the Post Office that the sub-post offices will offer the full range of services provided by Crown post offices. Indeed, the Post Office Users National Council report seems to suggest that there is more satisfaction with the service at sub-post offices than with that at Crown post offices.
As for my hon. Friend's first and important point, I emphasise that the Post Office has a comprehensive service of providing free aerogrammes to the Gulf—the blueys —and parcels can be sent to the Gulf at the same rate as the inland parcel rate. I was disturbed to hear what my hon. Friend said about some post offices not having blueys. When our troops are prepared to pay the supreme sacrifice, the Post Office must ensure that their loved ones can communicate with them easily. I shall write to the Post Office today.

Miss Hoey: I am sure that the Minister is aware of this week's report by the Post Office Users National Council, which welcomes the significant improvement in people's feelings about how capably the post office has been handling first-class mail. Will he use this opportunity to state clearly once and for all—and to keep morale in the Post Office high—that the Post Office will not be privatised under this or any future Government?

Mr. Leigh: The hon. Lady is right to draw attention to the Post Office Users National Council survey which shows that 86·2 per cent. of first class letters are being delivered the next day. As for her other point, the former Prime Minister, my right hon. Friend the Member for Finchley (Mrs. Thatcher) gave a commitment, which stands for the present Parliament. As regards the future, however, we are open minded and will consider all suggestions.

Mr. Soames: Is my right hon. Friend aware that one of the reasons for the fairly dismal performance of the first class letter service is the extensive restrictive practices still carried out by the trade unions represented in the Post Office? Will my right hon. Friend tell the House what steps he intends to instruct the chairman of the Post Office to take to break this union power?

Mr. Leigh: There have been some alarming cases of trade union industrial action which have resulted in a less than perfect service to Post Office customers. We keep these matters constantly under review. All options are open.

Property Descriptions

Mrs. Irene Adams: To ask the Secretary of State for Trade and Industry what further steps he is considering to protect housebuyers from misleading property descriptions following his review of the Trade Descriptions Act.

Mr. Leigh: As the then Minister told the House in several written answers last year, it is the Government's intention to amend the Trade Descriptions Act 1968 to apply its provisions to descriptions of real property. That remains the Government's intention, subject to parliamentary time being available. However, an order under the Estate Agents Act 1979, dealing with the misdescription of property, will be laid before the House as soon as possible. This is part of a package of measures to curb malpractices in estate agency which was announced last April by the then Minister and was the subject of a consultation document issued by my Department last year.

Mrs. Adams: Does the Minister realise that, because of the Government's refusal to introduce their own legislation on this, they have left the door wide open for hundreds of unscrupulous estate agents to mislead thousands of home buyers? How can the Government justify their lack of action?

Mr. Leigh: On the contrary, the Government have listened to a number of representations. My predecessor gave a commitment on behalf of the Government, which has necessitated a full consultation period during which a number of problems have come up; but if the hon. Lady had listened to my answer she would have heard me give a commitment. She may also be aware that my hon. Friend the Member for Coventry, South-West (Mr. Butcher) drew a high place in the ballot for private Members' Bills and intends to promote a Bill to deal with misdescription of property.

Mr. Anthony Coombs: Given the cost, inconvenience and occasional distress caused to house buyers by the more fanciful hyperbole of less scrupulous estate agents, will my hon. Friend agree that the measures shortly to be brought forward by the Government in regulations and in the private Member's Bill to which he referred are welcome not only for the benefit of consumers but for the benefit of the more responsible estate agents?

Mr. Leigh: Yes. My hon. Friend is right to draw attention to the lacuna in the present law, in that the Trade Descriptions Act 1968 does not cover real property. We know this and intend to take action. We also intend to take action on the Estate Agents Act 1979. [HON. MEMBERS: "When?"] We have had to wait for time in the legislative programme, but, as I have said, my hon. Friend the Member for Coventry, South-West is bringing forward a Bill in the next few weeks which should cover the problem.

Mr. Nigel Griffiths: I know that the House will want to join me in wishing the hon. Member for Coventry, South-West (Mr. Butcher) a speedy recovery from his illness.
Will the Minister tell the House why he has failed to give house buyers the protection that was promised in the Government's press statement on 19 June 1990 and which a Minister pledged to implement by the 1st of this month? Why is that protection not in place now nor likely to be in place for some months to come?

Mr. Leigh: The hon. Gentleman may be confused as between our determination to bring in primary legislation to amend the Trade Descriptions Act 1968 and secondary legislation under an order to amend the Estate Agents Act


1979. On the first of these, we must take our place in the legislative queue; on the second, the hon. Gentleman should wait and see.

Mr. Dunn: My hon. Friend should be congratulated on the answers that he has given to the House. Will he agree with me that, while it is necessary to say "caveat emptor", or "buyer beware", to anyone buying a good or service, the steps that my hon. Friend has outlined should be brought forward at the earliest opportunity to protect young people, who, as first-time buyers, may take estate agents' details at face value and be deluded into buying a property which is suspect in some way?

Mr. Leigh: My hon. Friend is quite right to draw attention to these matters. The Bill promoted by my hon. Friend the Member for Coventry, South-West has not been published, but we agree with its aims, in so far as we know what they are, and hope that the Bill will become law.

Manufacturing Output

Mr. McFall: To ask the Secretary of State for Trade and Industry what plans he has to boost manufacturing output.

Mr. Leigh: The Government promote continued growth of manufacturing industry with policies such as reducing rates of tax on profits, privatisation, deregulation, elimination of restrictive practices, trade union reform and negotiations to reduce trade barriers through the general agreement on tariffs and trade and in the European Community. In addition, my Department continues to operate a range of schemes to improve business performance under the enterprise initiative.

Mr. McFall: As manufacturing production has gone down by a staggering £2£5 billion in the past three months, 23,000 manufacturing workers are on short-time work, redundancies are running at more than 1,500 per week and high interest rates are costing British business £30 billion per year, when will the Government do the decent thing and either own up to their mistakes, overhaul their policy and start helping British industry or shut up shop and let the Labour party get on with the job of reviving British industry?

Mr. Leigh: I assure the hon. Gentleman that we have no intention of shutting up shop, or of letting our industry fall into the tender hands of a party that managed to reduce manufacturing output when it was in power. The hon. Gentleman's list is entirely selective. He ignores the fact that the prospects for British industry have been transformed in the last decade in terms of output, productivity and investment. The cost of a 1 per cent. rise in interest rates, even sustained over a full year, is far less damaging to industry in terms of wage costs than a 1 per cent. rise in inflation. The Government are determined to lick inflation.

Mr. Grylls: Does my hon. Friend agree that this question shows that there is a good deal of ignorance about what Governments can and cannot do? The one thing that Governments certainly cannot do is to boost manufacturing output. However, they can create the right climate. Will my hon. Friend use his influence with the

Treasury to promote lower corporate and capital taxes for business to encourage it to make the decisions to expand and boost output?

Mr. Leigh: My hon. Friend is right, and he well knows that corporation tax in Britain is among the lowest in the industrialised world. He is also right to say that we cannot simply boost output by increasing subsidies, as suggested by the Labour party; nor can we increase investment by piling up taxation. Inventiveness and hard work cannot be encouraged by imposing controls. Those are the policies of the Labour party, but they did not work in the past and will not work in the future.

Dr. Moonie: If the Government are not responsible for the mess that industry is in, who is?

Mr. Leigh: Industry is not in a mess. As I have said, the prospects for manufacturing industry have been transformed in the last decade. Output, productivity investment and exports are well above 1980 levels and exports are at a record level. I do not mind repeating that message, because we are proud of it.

Company Profitability

Mr. David Nicholson: To ask the Secretary of Stale for Trade and Industry if he will make a statement on the rise in the profitability of non-North sea industrial and commercial companies during the 1980s.

Mr. Lilley: The profitability of non-North sea industrial and commercial companies recovered strongly during the 1980s and is now back to the levels of the early 1970s. The net real rate of return on capital employed was 8·3 per cent. in 1989, nearly half as high again as in 1979. The restoration of profitability has made possible increased investment in plant, research and development, and training.

Mr. Nicholson: I thank my right hon. Friend for that reply. Does he agree that that achievement has been brought about largely by the massive improvement in productivity in the past decade, which for manufacturing has been better than that of any of our competitors? Does he also agree that the 45 per cent. improvement in business investment during the first three years of this Parliament bodes well for future profits? Will he confirm that a recent survey by 3i shows that 80 per cent. of the 750 largest companies thought that they were in better shape to prosper now than they were in the 1980s?

Mr. Lilley: My hon. Friend is absolutely right. Productivity rose by half in the past decade, which was faster than the position in any other major country in the world, including Japan. Profitability is the key to success, and the restoration of productivity leads companies to spend more on investment, research and development, and training.

Mr. Campbell-Savours: Would not the profitability of car manufacturers increase if they could sell more vehicles in Japan? What is the position? Is a British manufacturer of cars allowed to sell motor vehicles in Japan directly through a distributing agent to the public or does the British manufacturer have to go through a trading company, in the same way as Nissan at present has to go through one in the United Kingdom?

Mr. Lilley: Our exports in total to Japan have nearly doubled in the past three years. That includes a rapid rise in exports of motor cars, not least by the Rover company whose share of total imports of cars into Japan has risen significantly in the past five years and is rising at least as fast as that of other manufacturers. By and large, they are free to use whichever distribution channel they wish. There is a proposal by the Japanese Government to refer sole agencies to their anti-trust procedures. Last week I protested to them that they should not take that course, unless they also refer restrictive distributive practices by domestic manufacturers.

Aerospace Products

Mr. Colvin: To ask the Secretary of State for Trade and Industry what was the value of exports of aerospace products to the United States of America for the last full year for which figures are available.

Mr. Sainsbury: Aerospace products are included in a number of trade classifications. It is estimated, however, that the value of aerospace exports to the USA in 1989 was about £.1·5 billion.

Mr. Colvin: Those exports far exceed imports, which shows the value of the aerospace industry to this country's balance of payments. Is my hon. Friend aware that aerospace products are usually priced in dollars, that the value of the pound against the dollar is currently unrealistically high and locked into the exchange rate mechanism, and that British aerospace companies therefore have the alternative either of selling products at a loss or of exporting manufacturing jobs? Is he aware that tens of thousands of jobs are at stake to dollar countries, such as the United States of America and Canada? The German Government have a Government-funded insurance scheme to cover exchange rate contingencies. Will my hon. Friend undertake to investigate that scheme and consider introducing a similar scheme in this country?

Mr. Sainsbury: I join my hon. Friend in paying tribute to an industry which in the past decade of Conservative government has doubled both productivity and turnover in real terms. In addition, it has trebled its exports—an achievement to which we should all pay tribute. As my hon. Friend will know, the dollar weakness affects all other currencies, not just the pound sterling. He referred to a particular German scheme. We are very keen that our industries should be able to compete on a level playing field, although that is perhaps not quite the right metaphor for the aerospace industry. My hon. Friend may be aware that there are doubts about whether the scheme to which he referred is permissible under GATT rules and I understand that it is the subject of a formal complaint to the GATT subsidies code panel.

Mr. Cryer: Everyone hopes that hostilities in the Gulf will end quickly. Will the Minister therefore confirm that the long-term viability of the aerospace industry depends on the development of civil projects and that we should not depend on military expenditure solely, to the exclusion of virtually all other projects in the United Kingdom? Will the Minister express a sympathetic view to any approaches from the industry to support civilian ventures in the same way and to the same massive extent as the Government pours money into military ventures?

Mr. Sainsbury: I assure the hon. Member that we by no means depend on military aviation. We have had a number of notable successes in civil aviation. For example, GEC was awarded a contract to supply fly-by-wire systems for the Boeing 707; Rolls-Royce is taking a market share in the United States. The United States airline, America West, has signed an agreement with Airbus Industrie for the purchase of A320s. The civil aerospace industry is doing extremely well and I hope that it will continue to do so.

Telecommunications

Mr. Butler: To ask the Secretary of State for Trade and Industry if he will make a statement on progress in liberalising the telecommunications market.

Mr. Lilley: The Government have taken steps to introduce competition in all sectors of telecommunications. We now have the two largest cellular telephone networks in the world, the first telepoint services, and we are leading the world in the introduction of personal communications networks. Since British Telecom was privatised, quality of service has increased dramatically, prices have fallen by over 20 per cent. in real terms, and Mercury Communications has become established as a serious competitor. I made further proposals in the duopoly review for liberalisation to increase competition and choice for the consumer.

Mr. Butler: I welcome the additional competition and liberalisation in this country. Will my right hon. Friend now apply himself to overcoming the trade barriers to our manufacturers in Europe and Japan?

Mr. Lilley: I have just visited Japan, where I had talks with the trade Minister, aimed at liberalising trade. In particular, I encouraged him to take the big ticket items where Japan has a tendency to favour American rather than British imports.
We have sought liberalisation in other markets. We believe that one of the fruits of the liberalisation of our markets is that our manufacturers and telecommunications companies will be better placed to participate in those markets when they catch up with us, as they are beginning to do.

Mr. Simon Coombs: Does my right hon. Friend accept that the liberalisation of the telecommunications market that he proposes, and which I welcome, will nevertheless have a substantial—perhaps dramatic—impact on some existing and future players in that market? In that context, is he considering the use of techniques such as computer modelling to ascertain what the effect is likely to be? Such an exercise would help us to judge what his proposals should be.

Mr. Lilley: The duopoly review that I presented was a joint initiative with Sir Bryan Carsberg, Director-General of Oftel. His organisation has carried out the sort of modelling that my hon. Friend suggested to consider the impact of various regulatory and deregulatory proposals. We have endeavoured to take into account that line of reasoning.

Accounting and Auditing Practices

Mr. Cousins: To ask the Secretary of State for Trade and Industry if he will review accounting and auditing practices in the United Kingdom.

Mr. Redwood: The Companies Act 1989 made important changes in the law on company accounts, including improvements to the enforcement of accounting standards. It also provided a new regulatory framework for company auditors. The new Financial Reporting Council, Accounting Standards Board and Financial Reporting Review Panel have been established. Arrangements are in hand to strengthen and widen representation on the Auditing Practices Board. I shall be taking a close interest in how those changes work in practice.

Mr. Cousins: Is the Minister aware that his amazing smugness and complacency about the likely effect of the Companies Act 1989 flies in the face of experience? Is not the wide talk of profits for companies now largely fiction and a matter of opinion, with figures being massaged by standard accountancy techniques? Is the Minister further aware that such a state of affairs is not in the interests of the accountancy profession, the companies concerned or the reputation of Britain as an industrial centre?

Mr. Redwood: The hon. Gentleman and his hon. Friend the Member for Great Grimsby (Mr. Mitchell) have tabled 436 questions on accountancy in the past two years, but they seem to have learnt nothing about the enormous strides that the profession is taking in improving the regulatory framework. They have not understood the important provisions in the Companies Act 1989 which began the debate. Rarely have so many questions been asked by so few hon. Members to try to do damage to one profession. I wish that the Opposition would lay off the profession, because their intention is malevolent. If they did that, they would recognise that the profession has extremely high standards and that, wherever those standards might lapse, disciplinary and regulatory action is being taken.

Mr. David Shaw: Is my hon. Friend aware that United Kingdom accounting and auditing practices are the envy of much of the world, especially in eastern Europe where many British accounting firms now have offices doing a considerable amount of work? Is my hon. Friend also aware that the Companies Act 1989, which his Department brought into being, has set up a substantial

regulatory framework to ensure that our accounting profession stays at the top compared with the rest of the world? Can my hon. Friend give any reason to explain why the Opposition continue to knock the United Kingdom accountancy profession?

Mr. Redwood: My hon. Friend is quite right. The hon. Member did not need to table 436 very expensive and time-consuming questions in order to grasp the main point —that British accountants are doing extremely well in many world markets. My hon. Friend is also right to draw attention to eastern Europe where British accountants' skills are highly prized and where they have been spearheading export efforts in the service industries. I wish I could explain the reason for this persistent campaign by Opposition Members, but they will have to speak for themselves.

Shipbuilding

Mr. Salmond: asked the Secretary of State for Trade and Industry what is his current estimate of the capacity of, and employment in, the United Kingdom shipbuilding industry.

Mr. Leigh: Around 28,000 are employed in shipbuilding in the United Kingdom, of whom about 6,500 are in merchant shipbuilding. Merchant shipbuilding capacity is 205,000 compensated gross tonnes. Comparable figures are not available for warshipbuilding.

Mr. Salmond: Will the Minister come clean with the House and admit that the Government's policy proposals under the seventh directive will accelerate the decline in the shipbuilding industry? Can he point to even one policy measure from this Government which will arrest and reverse that decline rather than making the industry's problems worse?

Mr. Leigh: Contrary to what the hon. Gentleman says, it is in the interests of the United Kingdom shipbuilding industry for subsidies to be reduced. That is why we argued for a reduction in the intervention funding and why it has been agreed to reduce it from 20 per cent. to 13 per cent. for large ships and to 9 per cent. for small ships. That reduction is in the interests of the United Kingdom because we have led the way in restructuring European shipbuilding. It will be particularly helpful to warship-building yards such as Cammell Laird and Swan Hunter.

Israel (Missile Attack)

Mr. Gerald Kaufman: (by private notice):To ask the Secretary of State for Foreign and Commonwealth Affairs, if he will make a statement on the latest Iraqi missile attack on Israel.

The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hogg): Last night, and once again, Tel Aviv came under missile attack from Iraq. Latest statements by the Isreali Government indicate that, because of this attack, three people are dead and 98 are injured.
The House will endorse last night's statement by my right hon. Friend the Prime Minister. He said that he was appalled by this further savage attack on civilians. He expressed this country's deepest sympathy to the bereaved, to those who are hurt and to their families, and this House agrees.
My right hon. Friend the Prime Minister repeated our hope that, even now, the Government of Israel would show the forbearance that they have so far demonstrated and not give Saddam Hussein the satisfaction of drawing Israel into the conflict. This message was passed to the Government of Israel last night.
Israel is, of course, entitled to defend herself: that is not at issue. The question is whether it is in her interest to retaliate. We believe that it is not. To do so would be to play Saddam Hussein's game without in our view adding to Israel's security. I therefore hope that Israel, her Government and her people will continue to show the same patient and courageous restraint that they have already displayed in the face of outrageous provocation.

Mr. Kaufman: We on this side condemn this latest attack as a sign of the wickedness and desperation of Saddam Hussein. It is an act of wickedness to fire missiles armed with explosives at a country that is not involved in the war now taking place and is not involved in the dispute which led to the war. It is especially wicked to aim missiles at heavily populated centres where civilian casualties are inevitable. No doubt Saddam Hussein is proud that he has claimed the lives of three elderly, innocent women. We extend our sympathy to the bereaved families and to all the people of Israel in their ordeal and in their continuing anxiety.
It is an act of desperation to fire the missiles because no one with confidence in his war prospects would continue this cynical attempt to distort the issues in the war by trying to drag Israel into it. In any case, the Syrian and Egyptian Governments have shown that they do not intend to be taken in by those bloodthirsty manoeuvrings.
The Israeli Government deserve respect and admiration for refusing to fall into Saddam Hussein's trap. I trust that they will continue to maintain their self-restraint, without any bargain struck to win that self-restraint and difficult though it must be not to yield to the understandable impulse to hit back.
Saddam Hussein will lose the war, and the attacks will end. Peace will come to the middle east, and Israel must be part of that peace.

Mr. Hogg: I entirely agree with everything that the hon. Gentleman has said.

Mr. Michael Latham: Will my hon. and learned Friend confirm that there can be nothing worse for Jewish people than to be facing the prospect in a Jewish state of gas attacks and that such a thing is almost beyond belief after the Nazi holocaust? In expressing his concern and support for the state of Israel, as he did so well, will my hon. and learned Friend confirm that the Americans will do everything possible, with Patriot missiles and other means, to help the Israelis to defend their air space?

Mr. Hogg: My hon. Friend is entirely right. The people of Israel can feel certain that the countries of the coalition will do all in their power to defend the people of Israel against this kind of attack.

Sir David Steel: On behalf of my colleagues, I join in extending sympathy to the people of Israel in their present suffering. Will the Minister accept that not least of that suffering, apart from the deaths and injuries that have occurred, is the knowledge that they live from day to day and from hour to hour under threat of the most horrific and random terror from Iraq? Will he convey to the Israeli Government the admiration of some of us who have criticised their policies in the past of the fact that they will not fall for the ploy of Saddam Hussein's intended retaliation?

Mr. Hogg: I agree with what the right hon. Gentleman has said. As the Government of Israel will know, there have been differences between Her Majesty's Government and the Government of Israel on previous occasions, but on this matter the House, the Government, feel nothing but respect and admiration for the forbearance that has been shown by the Government and people of Israel.

Mr. David Tredinnick: Does my hon. and learned Friend agree that the Israelis have already gained much by staying out of the conflict? They have gained sympathy across the world, they have the Patriot defence system in place, and they have gained considerable understanding in Arab nations, which must be to their advantage in the long term.

Mr. Hogg: The people of Israel indeed have the respect of the British people; and I imagine that the people of Israel will also admire the fortitude that has been shown by the Arab members of the coalition, who have made it plain that, notwithstanding the brutal attack on a civilian target, they will stand firm against Saddam Hussein.

Mrs. Gwyneth Dunwoody: Does the Minister accept that in a democratic country people will expect to be defended by their Government on whom there will be great pressures? Will he pay tribute to the way in which the Israeli Government have resisted deliberate political attempts to link their future with a war that was not of their making and is not of their prosecution?

Mr. Hogg: The hon. Lady is right. The war was not of the making of the people or the Government of Israel. They have been subjected to unprovoked attacks against civilian targets. A sovereign state, the state of Israel, has the right to defend herself. The question is whether it is in her interests to retaliate, and we do not believe that it is.

Mr. David Sumberg: Is it not right to point out that every day our young and brave pilots are trying to minimise Iraqi civilian casualties while the Iraqi


regime rain down upon innocent men, women and children death and destruction? Let us as a House salute the bravery, fortitude and restraint of the people and Government of Israel.

Mr. Hogg: My hon. Friend has drawn a very important point to the attention of the House. The allied forces—in particular, the pilots—have taken enormous care to avoid causing unnecessary civilian casualties. Indeed, the latest estimate from the Iraqis bears this out. Such cannot be said of Saddam Hussein, who has launched Scud attacks against cities. By their nature, Scud attacks are undirected and indiscriminate. This is terror bombing of civilian targets.

Mr. Greville Janner: Does the Minister accept that it is for Israel's Government to decide, after listening to all advice, and on the basis of all intelligence, what to do to protect their own people? Does he accept also that it is totally unrealistic to expect the Israeli Government to allow their people to be submitted to a series of barbarous and monstrous attacks without taking retaliatory action?

Mr. Hogg: I accept that the state of Israel has a right to strike if it believes that it is necessary to do so. There is no question about that. What is at stake is whether it would be in the interests of the people of Israel to strike back. Of course, that is a matter for the Government of Israel. However, we can advise—indeed, we do advise—and we hope that the Government of Israel will respond to our advice.

Mr. Churchill: Will my hon. Friend convey to the people of Israel the sense of outrage of the people of this nation, whose civilian population have suffered the horrors of indiscriminate aerial bombardment? Will he convey our feelings of solidarity with the people of Israel at this time? Will he make it clear that we are determined not just to liberate the nation of Kuwait but also to smash the Iraqi war machine, which poses such a threat to the civilian populations of both Israel and Saudi Arabia?

Mr. Hogg: This country and its people suffered the consequences of indiscriminate bombing 50 years ago. We know what it means and, therefore, our hearts go out to the people of Israel.

Mr. Jim Sillars: I associate my colleagues and myself with the condemnation of the vicious and malicious attack that resulted in the deaths of people in Tel Aviv. May I ask the Minister, however, to reconsider his agreement in total with the statement made by the right hon. Member for Manchester, Gorton (Mr. Kaufman)? Is he not aware that this was not an act of desperation by Saddam Hussein but, rather, a key part of a very important political strategy? However despicable we in the west may find yesterday's attack, the harsh fact of life is that it deepens and widens Saddam's support at popular level in the Arab world. Does not that demonstrate clearly the west's political weakness in failing to recognise that until we take early action to convene a middle east peace conference we shall be liable to lose the political battle for the hearts and minds of the Arab people?

Mr. Hogg: The hon. Gentleman makes an important point when he says that broader issues have to be tackled.

They are urgent matters, and they will be tackled. It is very important indeed that the problems with regard to Palestine and the related issue of how Israel's security is to be assured be settled. The western countries will address these matters very urgently. However, they are not linked to this conflict; they are separate and distinct. We must stand on principle, and the requirement here is to remove Iraq from Kuwait absolutely.

Mr. Jacques Arnold: Do not the destructive events in Tel Aviv last night provide a glaring contrast between the moral and military approach in the middle east of on the one hand the allied policy of confining action against military and strategic targets and not the civilian population—a policy that the Iraqis admit has caused only 41 fatalities to date—and on the other hand the Iraqi policy of indiscriminately hitting centres of civilian population not only in Israel but also in Saudi Arabia?

Mr. Hogg: My hon. Friend is right. The use of Scud missiles is the use of a terror weapon.

Mr. Ernie Ross: I entirely support the statement by my hon. Friend the Member for Manchester, Gorton (Mr. Kaufman). The Minister was right to say that those missiles, by their very nature, are undirected and indiscriminate. That demonstrates Saddam Hussein's lack of concern for the Israeli-Arab population in Israel. Given that Saddam Hussein still retains the ability to lauch indiscriminate attacks on Israel and the west bank and Gaza, will the Minister discuss with the Israeli ambassador in London how those prisoners who are held in the Negev desert and living in tents can be protected from indiscriminate attacks? If the Government have any spare gas masks that might fit young people under the age of 15, could they be supplied to the Israeli Government because they are having difficulty in providing masks to young Palestinians under the age of 15?

Mr. Hogg: The hon. Gentleman's latter point is important and I shall reflect on it. In response to the first part of the hon. Gentleman's question, I can say, yes indeed. We must bear in mind another interesting point. Saddam Hussein says that he is a great respecter of Muslim holy places, but we must remember that Scud missiles are perfectly capable of destroying mosques and other holy places. What credit do we give to such a man?

Sir Anthony Grant: Although I condemn the disgraceful attack which was borne so courageously by the Israeli people, does my hon. and learned Friend agree that it is very important not to get the power of the Scud missile out of all proportion? It can be countered. Does my hon. and learned Friend agree with an article in The Times today which pointed out that the Scud missile, rather like the Stuka dive bomber in the second world war, is as much a psychological as a military weapon? Is it not important to state that the users of Scud missiles will as assuredly be defeated as were the users of the Stuka dive bombers in the last war?

Mr. Hogg: My hon. Friend is right. The Scud missille can indeed be countered and, for the most part, has been countered, largely by Patriot missiles. I also agree that it is largely a psychological weapon. However, last night it


killed three civilians, and Scud missiles have injured a large number of innocent civilians. That tells us a great deal about Saddam Hussein.

Rev. Martin Smyth: Does the Minister accept that, as I represent the people of Belfast who have suffered indiscriminately from terror, and the birthplace of the president of Israel, our sympathy goes out to the president and to the people of Israel at this time? Does he also accept that it is a foolish person who does what his enemy wants him to do in a conflict, and we commend the Israelis' restraint?

Mr. Hogg: I am grateful to the hon. Gentleman who, more than most people, understands the impact of indiscriminate bombing. The people of Israel will be grateful for what has been said.
On the second part of the hon. Gentleman's comments, I very much hope that the Government of Israel will not play Saddam Hussein's game.

Several Hon. Members: rose—

Mr. Speaker: Order. This is a private notice question. I will allow two more questions from each side of the House and then we must make progress.

Miss Emma Nicholson: We welcome yesterday's announcement of the setting up of the Gulf trust for the families of the service men and women who are defending freedom. Will my hon. and learned Friend today underscore our deep distress and our support for Israel during her latest trauma by offering aid to her children, perhaps through Children and Youth Aliyah, which is the children's arm of the Zionist organisation helping children in Israel? Will my hon. and learned Friend subsequently assist hon. Members like me who I know will want to go further and form some kind of a trust for the children of the people who will be our former enemies—the Iraqi children—because in the immortal lines of Bernard Shaw, "I have no enemies under seven"?

Mr. Hogg: Not only that, but we have no quarrel with the Iraqi people. Our quarrel is with Saddam Hussein and those who stand behind him. The first part of my hon. Friend's question involves detailed proposals, and I shall be very happy to discuss them with her.

Mr. Tony Benn: Is the Minister aware that there have been and will be many more wholly innocent victims of the escalating conflict in the middle east and that the House will wish to express its sympathy to those in that area, including those in Tel Aviv? Is he aware also that the great danger now is an escalation and extension of the conflict in which Israel and Jordan and perhaps other countries may be involved? As that represents a distinct threat to international peace and security, will he refer the latest incident to the Security Council so that it can meet to consider the full implications of what is now happening in the middle east conflict?

Mr. Hogg: That there has been an extension of the conflict is true, but the extension takes the form of Saddam Hussein attacking Israel, which country is not party to that dispute.

Mr. Robert Banks: Does my hon. and learned Friend agree that the indiscriminate bombing of civilians is the most baseless and deplorable action in war? Will he reaffirm that, in pursuing victory in this war, in no circumstances will the allies target civilian targets?

Mr. Hogg: Very careful instructions have been given to the commanders in the field to take great care to avoid unnecessary civilian targets and also to avoid cultural and religious sites of significance. Indeed, it is quite plain that coalition pilots have either not attacked because they thought that they might threaten such targets or have actually risked their lives to reduce the risk to those targets.

Mr. John Home Robertson: I endorse everything that has been said about the cynical and indiscriminate attacks on Israel. However, I urge the Minister and the House not to lose sight of the fact that fully 800 people have been killed by the Israelis in their oppression of territories occupied in flagrant contravention of United Nations resolutions for 23 years. In view of that, whatever happens in the aftermath of these incidents —I hope that the coalition will hang together—can our Arab allies in the coalition depend on the United Kingdom Government to press for urgent action following the resolution of the conflict to satisfy the just demands of the Palestinian people?

Mr. Hogg: We are very conscious that wider issues must be tackled. They include how one best provides for self-determination for the Palestinian people. They also include, of course, how one assures a safe and secure future for the state of Israel. They are vital matters, and we shall consider them as soon as we can.

Mr. Michael Colvin: On a point of order, Mr. Speaker.

Mr. Speaker: Order. I am on my feet.

BILLS PRESENTED

COAL MINING SUBSIDENCE

Mr. Secretary Wakeham, supported by Mr. Secretary Heseltine, Mr. John Selwyn Gummer, Mr. Secretary Hunt, Mr. Secretary Lang, Mr. David Heathcoat-Amory and Mr. Colin Moynihan, presented a Bill to repeal and re-enact with amendments the Coal-Mining (Subsidence) Act 1957 and, in the Coal Industry Act 1975, section 2(4) and paragraphs 1 to 4 of Schedule 1; to make provision for imposing further obligations on the British Coal Corporation, including obligations corresponding to those voluntarily accepted by them under their code of practice concerning compensation for subsidence damage; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 63.]

BUILDING CONVERSION AND ENERGY CONSERVATION

Mr. Robin Squire, supported by Sir Richard Body, Mr. Peter Rost, Mr. Tony Speller, Mr. Clive Soley and Mr. Terry Davis, presented a Bill to require the insulation against heat loss of dwelling units provided by the conversion of existing dwellings; and for connected purposes: And the same was read the First time; and ordered to be read a Second Time on Friday 19 April and to be printed. [Bill 65.]

STATUTORY INSTRUMENTS &c.

Ordered,
That the Farm Diversification Grant (Variation) Scheme 1991 (S.I., 1991, No. 2) be referred to a Standing Committee on Statutory Instruments, &amp;c.—[Mr. David Davis.]

Points of Order

Mr. Michael Colvin: On a point of order, Mr. Speaker. I apologise for rising when you were on your feet. Will you acknowledge that the policy of private notice questions or ministerial statements followed by plenty of time for questions by Back-Bench Members, rather than full-blown debates at regular intervals, might be a better way for the House to respond to events in the Gulf as they unfold?

Mr. Gavin Strang: Further to that point of order, Mr. Speaker. The House has a responsibility to give maximum opportunities to all Members of Parliament to participate in debates about what is happening. If nothing else, we owe that to our service men. We also have a responsibility to do so because one of the fundamental distinctions between this country and Iraq is that we actually support a parliamentary democracy.
I plead with you, Mr. Speaker, that the House must have more days to debate the issue. We must have longer time to debate statements. This afternoon we had 20 minutes to debate the attack on Israel. That is inadequate time. I strongly appeal to you, Mr. Speaker, to give hon. Members a full opportunity in the coming weeks, or even months, to speak their minds on this crucial issue.

Mr. Speaker: It is a continuing situation and the hon. Gentleman has had that opportunity. He has made a speech in a recent debate. There are business questions tomorrow, and he can put his question to the Leader of the House then.

Mr. Tam Dalyell: On a point of order, Mr. Speaker. It will be within your recollection that at 10.30 pm yesterday a request was made by several hon. Members for a statement on not only the attack on Tel Aviv and the loss of a Tornado but on what proposals have been made, if any, to do something about the Al-Wafra oilfield which is ablaze. We asked for an answer on who will put out the fires. Are they to be allowed to damage the planet for the foreseeable future? Could you not use your influence to ask the Government to make statements on serious matters which will not wait until after the weekend?

Mr. Speaker: I allowed a private notice question today on a subject submitted to me. The matter now raised by the hon. Gentleman was not submitted.

Mr. Dave Nellist: On a point of order, Mr. Speaker. Will you confirm for my benefit and that of other people that you granted a private notice question today and that, contrary to what we were led to believe by the Leader of the House last night, the Government did not offer to make a statement? If they had done so, questions would have run for much longer and everyone who wished to speak would have been called. Will you confirm that you were restricted by the rule of the House which states that on private notice questions only six or seven hon. Members from each side should be called?

Mr. Speaker: I was in the Chair last night, but I did not hear the Leader of the House promise that a statement would be made today. He said that he would take the


request into consideration. The House should understand that a private notice question is an extension of Question Time. This is a continuing situation.

Mr. Dalyell: Further to that point of order, Mr. Speaker.

Mr. Speaker: Order. I shall not take any more points of order. The hon. Gentleman has overstayed his welcome.

Water Requirements (Planning)

Mr. Hugo Summerson: I beg to move,
That leave be given to bring in a Bill to require a person seeking planning permission for a new building to send an estimate of the annual water requirement of the building to the area water company at the same time as submitting the application for planning permission to the planning authority.
This is a conservation measure. Water literally surrounds us all. Hon. Members will be surprised, amazed or delighted to hear that they themselves are 62 per cent. water. Even on this side of the House, the dries just as much as the wets are 62 per cent. water. So it is clear that we all have a great affinity to water. Estate agents are well aware of that. They know full well that a house which overlooks the sea, a lake, a pond or a river will command a premium price. Water is attractive to us all.
However, water is considerably more valuable than simply for looking at. Indeed, in the jargon of the age, water is one of our most precious natural resources. We wash in it. We wash our cars with it. We wash our dishes and our clothes in it. We fill paddling pools with it for our children. We put it on our gardens. I believe that some people even drink it. It is because water is so popular that I hope to obtain leave to introduce my Bill today.
People say that there is plenty of water in the tap, but they do not realise how much they consume. For example, flushing a lavatory takes two gallons. Running a bath takes 18 gallons, or more if one likes to lie in the bath for a long time until the water goes cold and one must let some out and put some more hot in. A washing machine cycle takes 25 gallons of water. A typical household uses 105 gallons of water a day, while a hosepipe or sprinkler uses no less than 220 gallons an hour.
On top of that, it takes one gallon of water to make a pint of beer. It takes 100 gallons of water to make a ton of concrete. It takes 1,000 gallons of water to produce a tonne of steel and it takes 6,600 gallons of water to produce a car —although my figures do not specify whether that would be a Metro or a Rolls-Royce.
The demand for water is increasing all the time. In 1974, total use was 15,000 megalitres per day, while last year it was nearly 17,500 megalitres per day. I apologise for suddenly changing from gallons to megalitres, but it was quite beyond my capacity to convert megalitres into gallons. Besides, megalitres sounds much more impressive.
All that water must come from somewhere. It is derived from various sources, mainly boreholes, reservoirs and rivers. Such is the demand, however, that many sources are becoming seriously depleted. For example, the Rivers Allen and Piddle in Dorset and the Kennet in Berkshire are being ruined. They are beautiful, lovely, living things. What can be more beautiful than a river?
Aquifers are being pumped and, as a result, bores and springs are drying up. In Wiltshire, some bores have not run for many years—due not only to drought but to water usage. The situation is becoming intolerable.
My Bill has two objectives: first, to try to bring home to people how much water a building consumes, in the hope that, in this supposedly conservation-minded age, they will design into buildings as many water-saving devices as possible; and, secondly, to enable water authorities to plan ahead.
I have received comments from several water authorities on my proposals. South West Water supports those two main objectives. It says:
There is no doubt of the importance of making our customers aware of the cost and value of the water required to support their proposals, and any advance information which can be provided to the water companies is extremely useful for planning purposes.
North West Water stated:
It is helpful for customers and potential customers to be more aware of their requirements for water and, of course, we are always keen to know as soon as possible of potential new demand for our services.
Severn Trent Water stated:
It is a very good idea, and should be extended not only to the erection of a building, but to any change or alteration in any building that requires planning permission.
Southern Water stated:
It would be of assistance if your proposals could be extended so that notification is given also to the sewerage undertaker.
Welsh Water said:
We have long felt that any planning applications should be formally referred to ourselves for all the obvious reasons".
Northumbria Water stated:
Consultation with water undertakers has become more tenuous as we are no longer statutory consultees under the Town and Country Planning legislation.
It welcomed my proposed strengthening of the planning legislation.
I believe that the Bill would promote the conservation of water. It would also represent an excellent tool to enable water authorities to plan ahead. I hope that the House will give me leave to bring in my Bill.

Question put and agreed to.

Bill ordered to be brought in by Mr. Hugo Summerson, Mr. Thomas Graham, Mr. Ian McCartney, Mr. Humfrey Malins, Mr. Tony Banks, Miss Emma Nicholson, Mr. William Hague, Mr. Geraint Howells, Mrs. Elizabeth Peacock, Mr. Andrew Welsh and Mr. Tony Favell.

WATER REQUIREMENTS (PLANNING)

Mr. Hugo Summerson accordingly presented a Bill to require a person seeking planning permission for a new building to send an estimate of the annual water requirement of the building to the area water company at the same time as submitting the application for planning permission to the planning authority: And the same was read the First time; and ordered to be read a Second time on Friday 12 April and to be printed. [Bill 58.]

Orders of the Day — Community Charges (Substitute Setting) Bill

Not amended (in the Standing Committee), considered.

New Clause 1

SUBSTITUTED AMOUNTS: COLLECTION FUND

`( ) (1) The following section shall be inserted after section 35 of the 1988 Act—
35a.—(1) For the purposes of Section 35(5) above, where the Secretary of State determines to make an order in respect of a charging or precepting authority under sections 104(2) or 106(2) below, as a result of which it is required to set a substitute amount under section 35(4) above, he shall, before laying a draft of any such order under sections 104(8) or 106(4), lay before Parliament an estimate of the losses likely to be incurred to the collection fund of any authority referred to in such an order as a result of the setting by it of a substituted amount.
(2) Any estimate laid before Parliament under subsection (1) above shall be notified to the authority concerned.
(3) Any estimate laid under subsection (1) above shall have regard to any information received from the authority regarding sums likely to be received by it in respect of its community charges by the date on which the order is expected to be laid.
(4) In laying any estimate under this section, the Secretary of State shall specify—

(a) an estimate of the additional community charge in the following financial year likely to result from the losses estimated under subsection (1) above; and
(b) a schedule of the reductions in services which the Secretary of State considers the authority would be likely to be required to make equivalent to any such loss".'.

Brought up, and read the First time.

Mr. David Blunkett: I beg to move, That the clause be read a Second time.
We have tabled the new clause because we cannot separate the Bill from the shambles of the Government's policy on the poll tax and poll tax capping generally. It is designed to deal with the situation arising out of a substitute bill to be set by the Government consequent on a capping order. We now know from the statement of the Secretary of State last Thursday that the bills that will go out next year will be related directly to the rates that were previously set. The formula involves a £104 difference between the old rates and the assumed bill for the current year plus whatever is levied by the local authorities for the coming financial year.
The Secretary of State not only controls the "assumed" bills but, under the capping arrangements, he controls the bills that will go out next April. He controls both future and present arrangements. It should be left to the authority to try to justify the charge that it thinks should be levied in relation to a given level of services, which the Government are to determine for each individual authority.
Matters are made far worse by the fact that the standard spending assessment formulas which the Secretary of State confirmed on Thursday will he


unchanged, are universally acknowledged to be flawed. The assessment of need, the distribution of grants, the fixing of bills and the determination of capping are all in the hands of a Government who decline under the present Bill to take into account known information that would allow logical decisions to be made about the level of services and the raising of cash to contribute to the collection fund. That is why I described the Government's policy as a shambles. I would have called it a dog's dinner, but the dog takes offence at such remarks.
Things would not be so bad if the Government were willing to accept the new clause, thus acknowledging that those who are in control of decision-making should recognise the need to obtain the maximum up-to-date information on which to base their decisions. The new clause would require them to do that. The Government want to take responsibility for the benefits, as they see them, of poll tax capping and for the new relief scheme, but they do not want to take responsibility for the circumstances relating to the collection fund and consequently for the cuts involved in capped authorities and their effects on residents and citizens.

Mr. Patrick Nicholls: The hon. Gentleman referred to a shambles and to decisions that have to be made by decision-makers. Will he comment on the shambles in many Labour-controlled authorities, one of which is Islington? A QC's report on Islington council said:
Having the cash office staffed by the innumerate, the filing done by the dyslexic and disorganised, and reception by the surly or charmless seems to us a recipe for administrative chaos.
That is where the chaos surrounding the community charge really lies—with Labour local authorities which could not organise a celebration in a brewery. Will the hon. Gentleman now address the real problem?

Mr. Blunkett: I think that some Conservative Members know more about celebrations in breweries and the consequences for their party funds than they do about decentralised offices in Islington. I might put on record in relation to Islington the fact that the Prime Minister made a remark yesterday, in answer to questions about empty housing in Islington, which was grossly inaccurate. Islington has one of the best records in London on vacancies; they now run at less than 2 per cent., which compares extremely favourably with the operation of Government Departments.

Mr. Eric Illsley: The hon. Member for Teignbridge (Mr. Nicholls) quoted counsel's opinion on a collection office in Islington which stated that it was manned by people who were innumerate and dyslexic. I believe that he was using the terms in a derogative fashion. Will my hon. Friend confirm that "dyslexic" describes people who have a medical condition and is not a term of insult?

Mr. Blunkett: Yes. I hope that the hon. Member for Teignbridge (Mr. Nicholls) will withdraw that. Although none of us wants circumstances in which those who are operating decentralised offices are alleged to be innumerate, all of us accept that dyslexia is an educational medical condition, but that it can be overcome, as

Conservative Members well know. I give credit to those who have overcome the problem, not least on the Government Benches.

Mr. Nicholls: The hon. Gentleman asked me to withdraw what I said. I do not think that the hon. Member for Barnsley, Central (Mr. Illsley) understood my point. I was not making disparaging remarks about dyslexics. I was quoting a report by a Queen's counsel on the way in which Islington council chooses to organise its affairs. Whatever one may say about the handicaps of dyslexics, to put them in charge of operations such as filing seems a curious way to help them. It is the condemnation of the Labour council which matters. That is the point to which the hon. Gentleman should respond, but which he will seek to avoid.

Mr. Blunkett: It is not a point that I seek to avoid. I made it clear that people who are innumerate should not be dealing with the administration of area offices, whether or not QCs have done an investigation. Dyslexia does not come into it, whether it is in the Department of the Environment or a decentralised office in Islington. I take considerable offence at the idea that the two conditions are synonymous.

Mr. Robert G. Hughes: The hon. Gentleman referred to the Prime Minister's remarks yesterday about housing in Islington. In the light of what he said, will he comment on the eight flats rented from private landlords by the council at great expense—using Government money—which were kept empty by the council for between 40 and 83 weeks? Is that how the council uses Government money to help homeless people?

Mr. Deputy Speaker (Sir Paul Dean): Order. The hon. Member for Sheffield, Brightside (Mr. Blunkett) is being very generous in giving way. I am sure that he will not be deflected from new clause 1.

Mr. Blunkett: I certainly will not.
Lettings, whether on a leasing arrangement that is being set aside or direct from the housing revenue account, are not the responsibility of the House. There is a direct relationship between the electors of the borough and those they elect. The point of the new clause is that those who have responsibility should be accountable for the decisions that they take. Through the clause, we seek to ensure that those who have the temerity to take decisons about poll tax levels, capping provisions and the necessary resources to meet a given level of service should be accountable for their decisions and should seek the maximum information on which to base their decisions.
Otherwise—I come back to where I left off earlier—the Government will be happy to take responsibility for fixing the poll tax and cuts in general, but will not be happy to take responsibility and to be held accountable for the misery caused by the cuts that they inflict on the electorate of for the confusion and administrative difficulty that they cause to authorities.

Mr. Richard Holt: The hon. Gentleman mentioned manifestos. Which Labour-controlled authority included in its manifesto the figure that it was going to charge in ensuing years, if elected to office, so that community charge payers knew what they were voting for in monetary terms?

Mr. Blunkett: In London and the metropolitan areas, the poll tax is fixed in February or March. The bills are sent out at the beginning of April, and—unlike central Government—the elected representatives have the temerity to stand for election each year at the beginning of May. There can be no more direct relationship between the bills sent and the judgment of local citizens than that. I am amazed that Conservative Members do not know how the system works—

Dame Elaine Kellett-Bowman: rose—

Mr. Blunkett: I am delighted to give way to the hon. Lady, who will make an outstanding contribution that will enlighten her fellow Tory Members on how the system works.

Dame Elaine Kellett-Bowman: The hon. Gentleman may be right that there is a relationship under some unitary authorities, but he is wrong about authorities such as mine. The county council spends 9p in every 10p, so there is precious little for local district authorities to do once the money has been blued by the county council.

Mr. Robert G. Hughes: The hon. Gentleman does not care about that.

Mr. Blunkett: The hon. Gentleman says that I do not care about that; I care greatly about it. We have proposals to improve the operation of local democracy: annual elections in local authorities, the development of unitary government, giving people clear responsibility by removing capping, sensible standard spending assessments and needs systems, reinstating equalisation between different local authorities. All these would introduce direct accountability and would help the hon. Lady's electors to make a direct judgment on what was happening in their area.

The Parliamentary Under-Secretary of State for the Environment (Mr. Robert Key): I was most interested in the hon. Gentleman's list of proposals for the future of local government. Will he come and discuss them with the Secretary of State and me?

Mr. Blunkett: I repeat what I and my hon. Friend the Member for Dagenham (Mr. Gould) have often said: we are happy to hold discussions on this issue if the Secretary of State will accept the simple principle that the poll tax should be abolished. I welcome the interventions this afternoon, not least because they reveal the paucity of knowledge among Conservative Members, who appear extremely concerned by the clause, which merely seeks to ensure that information is available to Ministers when they make their decisions and that they are held accountable by local electorates for what they do.

Mr. Phillip Oppenheim: I appreciate the hon. Gentleman's courtesy in giving way so often on this point. I am worried by his complete failure to mention any funding commitments by a future Labour Government. Last July the hon. Gentleman condemned the £3 billion increase in external funding as "peanuts". If that was peanuts, by how much would a future Labour Government increase funding? Will he answer that in a straightforward way?

Mr. Deputy Speaker: Order. The hon. Gentleman will find it somewhat difficult to answer that question within the confines of new clause 1.

Mr. Blunkett: I would find it as difficult to answer that question as hon. Members would have found it difficult eight days ago to guess how much the Secretary of State was going to get from the Treasury or from cuts in public services to make up the extra £1 billion. I am glad that the Conservatives are pouring money into the system to try to hold down the poll tax—not just because it helps people, but because it will make our lives a great deal easier when we transfer to a modern property tax based on ability to pay. It will certainly make much easier my arguments and those of my hon. Friend the Member for Dagenham with the new Chancellor when we take office.
I return to the Bill. I was simply saying that cuts in services will be initiated by the Government, not only by capping authorities but by using a formula of A minus B minus C over D instead of using the relevant information that is available at the time and taking into account changes that have occurred between the original decision on capping and the order laid for the individual authority's poll tax. Those things are important because, for every £1 that cannot be raised towards the collection fund, £1 of cuts must be made in local authority services or be carried over into the following financial year. This must be picked up by local taxpayers, sometimes entailing the need to borrow; charges are incurred on the borrowing and this pushes up the actual charge necessary to meet what would have been the previous poll tax or local authority tax. The position is made much worse.
In other words, the Bill is ill-timed, unnecessary and out of date not only because of the Government's change of heart towards the poll tax, but because of last Thursday's statement. Since the conclusion of Standing Committee F, therefore, we have even more reason to reject the Bill and to carry this new clause, which seeks to make some sense of what is before us.
It is clear that we must ask the Government to justify what they are doing. When we did so in Committee we had some interesting replies. The Under-Secretary of State said:
All authorities must make their best estimate of income and expenditure at the beginning of a year and live with the consequences".—[Official Report, Standing Committee F, 15 January 1990; c. 108.]
Who would disagree with that? But, of course, once the authority has been capped, the situation changes. If the authority has taken into account all the circumstances and has made all the necessary adjustments, it will be ruled out of order.
The Bill deals with the sort of position in which Lambeth found itself when it made a calculation based on its circumstances. Lambeth also made a calculation of what would happen if it was tax-capped. When it went to the High Court, it won. We are debating this Bill on Report and Third Reading and moving the new clause precisely because Lambeth won the case. It was adjudged to have taken due care in its decisions and to have properly weighed the information available to it at the stage to which the Under-Secretary of State referred.
That made us wonder whether everyone who supported the Bill really understood what it was about and what it was intended to do.

Mr. Richard Tracey: The hon. Gentleman makes it sound as though Lambeth council is a well-organised London borough. Will he confirm that Lambeth council could not send poll tax bills to people earlier than the day before the local elections in May? Can he say whether many people in Lambeth have received their bills from the council? It is our understanding that most people in Lambeth are still waiting for their bills. Lambeth council is in chaos.

Mr. Blunkett: Whatever the rights and wrongs of the debate about the effectiveness of services in Lambeth, the council can hardly be blamed for not sending out the bills by 1 April, consequent on the decision of the Government to cap it. If the hon. Member for Surbiton (Mr. Tracey) examines the logistics of the position, he will be forced to conclude that the best that Lambeth could do was to announce what figure it intended to levy if it were free to do so. The electors in Lambeth made their decision precisely on those figures, with the debate in the House still to take place and with a court judgment on the validity of the Government's action also pending.
Everybody knew about Lambeth's bill because the Government made their best efforts to publicise what it would be and what their substitute setting would be. Therefore, a clear judgment could be made about whether to accept the Government's bill or that of Lambeth council. People made that judgment and voted Labour, and no one can cast aside the result of a clear democratic election that was held only a few weeks after the decision to set the poll tax had been publicised.
In Committee, the Under-Secretary of State said:
All authorities are in the same boat.
That is the flagship that is rapidly sinking. He said:
Opposition Members are trying to put capped authorities in a boat by themselves".
It would have been appropriate for the Minister to say "a lifeboat". He continued:
But there is no justification for that. There is no reason why a capped authority should have an opportunity that is not available to other authorities to reconsider matters such as its estimate of non-collection when resetting its charges after capping.
As I said, Lambeth council had an opportunity to weigh up the information available to it before capping and at the point at which it set its poll tax. That was upheld by the court and the Bill deals precisely with that situation by disqualifying the council. Far from us trying to get capped authorities into a lifeboat, which in other circumstances and in another connotation we would seek to do, we are trying to ensure that capped authorities are on all fours about being able to use the information that is available to them.

Mr. Key: I do not wish to be the tail that wags the hon. Gentleman's dog. I know that he is scrupulously fair: if he reads on in column 109, he will find that I said:
Moreover, it is clear that under the present statute a capped authority cannot change its non-collection estimate to allow for the fact that it has been capped. Haringey tried to do that this year when it reset its charge after capping, but that was subsequently quashed by the divisional court."—[Official Report, Standing Committee F, 15 January 1991; c. 108–9.]
Once again the Opposition are confusing the existing statute with the Bill.

Mr. Blunkett: We are not confused and we have shown that not only by our interventions and contributions but by the words that I read to the House. We understand very

well what we are trying to do. In this somewhat limited and irrelevant Bill, we are trying to prevent the Government from having the power to set poll tax levels without using the necessary information and without making sensible judgments about the impact on the collection fund and, consequently, on the following year's poll tax or on the cuts that will have to be made. In Committee, we went into detail on matters that would affect those judgments.
The level of the collection fund will be affected by the precept that is levelled by the precepting authorities and by the national non-domestic rate pool which draws on the collection fund. Of course, it will also be affected by section 95(4) of the 1988 Act, which deals with withdrawal of the local authority's general fund requirements, and by how much is collected. We made a substantial case, and shall make it again, about the importance of bearing in mind when making decisions the consequences of capping itself. Those who cap should be wary of enforcing algebraic formulae on authorities that have to live with the consequences. If collection rates are affected by a delay that inevitably occurs because of capping, it should be taken into account. It is common sense to recognise that collection rates can and will be affected.
The Government do not have to take our word for it, or even the word of local authorities. We know that the Audit Commission is concerned about the difficulty in some areas of collection, such as the 4 million people who are at the bottom income levels and who are charged the minimum poll tax. There is also the question of those who move house and who local authorities, particularly in inner-city areas, are endeavouring to chase for their poll tax payments. In other words, depending on the area of the country, the 10 to 40 per cent. turnover rate in the locality will have a substantial effect. In my authority, between the date at which the relevant population was asssessed and the beginning of the financial year there has been a 6·3 per cent. population change.
4.30 pm
We also pointed out that it was important to understand the difference between the "relevant population" and the "equated population". In a council such as Haringey, it made a difference of £ 1 million in income—a substantial amount for day nurseries, nursery schooling, home helps and meals on wheels. These things matter greatly, especially in an authority which had to make cuts of £28 million to get within the capping criteria in the first place. The amount that would come off poll tax this year in Haringey was affected by about £6; it would have been £70·70 for the relevant population and £64·30 for the equated population, making a difference of £1 million in terms of neglect. The consequences had to be dealt with not by Ministers but by local councillors struggling to make the budget balance.
That is why we tabled the new clause. We want the maximum information about what is happening to the collection fund and its likely outturn, a matter that we would expect any local authority to take into account. This is called fiduciary duty. Under the 1988 Act, local authorities have something called a whistleblower. We would like a whistleblower on Conservative Members. Time is up for the poll tax and the way in which Conservative Members have colluded with a lie. It is a lie that one can enhance democracy by taking it away; that one can increase accountability by removing it from local


people and their elected representatives and by taking responsibility but then trying to shift the blame on to the shoulders of local councillors.
The Government want to have the best of both worlds. They want capping, the poll tax and the gerrymandering of bills as a result of last week's announcement, and they want cuts. They want all this without having to deal directly with the consequences and without having to spell out, as we ask in the new clause, the consequences of the expected cuts. They are oblivious of the long-term increase in the poll tax because of the deficiency on the collection fund. For all those reasons, I ask all hon. Members to vote for the new clause.

Miss Emma Nicholson: I oppose new clause 1, not on any ideological account and not because I do not take seriously the interesting and demanding questions posed by the hon. Member for Sheffield, Brightside (Mr. Blunkett). Indeed, I pay tribute to the hon. Gentleman's great courtesy in giving way so many times. The only reason I did not ask him to give way was that I wanted to make a slightly longer series of points in response to his comments.
The hon. Member for Brightside referred to the fact that this was a fundamental platform. He pointed out that every £1 capped equalled a cut of £1. That presupposes both perfect efficiency in every local authority and a level of service throughout that is constant. That would then achieve the result suggested by the hon. Gentleman—every £1 capped would equal £1 of cuts.
Of course, we know that that is not true. That has not happened. In September last year, the National Association of Local Government Officers conducted a survey of the capped authorities, and the union-owned newspaper Public Service reported that Basildon had said that no redundancies were anticipated; Brent had said that no cuts were required as a result of capping; Bristol had said that there would be no redundancies, no cuts in services and no charge increases; Calderdale had said that it was holding growth, increasing some charges and cutting some non-essential services; and Camden had said that no cuts were necessary. The cap was £4·4 million, but Camden council said:
Our income is sufficient for us not to need to make cuts.
Greenwich said that some redundancies were expected, but that there would be no large-scale job cuts, and Lambeth said that it had managed to avoid closure of front-line services and that there would be no redundancies.

Mr. Illsley: The hon. Lady is reading out an interesting list—

Miss Nicholson: I have a longer one.

Mr. Illsley: In that case, perhaps the hon. Lady will tell us what the list says about my authority, Barnsley, and what cuts it had to make.

Miss Nicholson: I do not intend to list the cuts, results of cuts, or results of capping for every hon. Member's local council. Of course, if I did it would not take too long, as there are so few Opposition Members present for a debate about a matter which they claim causes them great concern.
I was not at all surprised by that survey. The hon. Member for Brightside should not be surprised either, despite his bland statement that every £1 capped should equal £1 of cuts. The reason why I was not surprised is that

I have had practical job experience working both inside and alongside local authorities, be they district councils, county councils or that great departed monolith whose death I welcomed and whose funeral pyre I should have liked to light myself, the Greater London council.
My work with local authorities was during my pre-parliamentary years, when I worked in industry, in business and in the voluntary sector. I well recall the appalling shock that I received, as someone who believed in the high level of services that local authorities were supposed to provide—I knew less then and I was more naive about the massive incompetence in some of the geographical areas—when I went to the GLC to do a job for the computer industry. You are highly computer-literate, Mr. Deputy Speaker, so you will know that it is crucial that different forms of machinery and different forms of software interlock—[Interruption.] Of course Mr. Deputy Speaker is computer literate; everybody with a farming constituency is computer literate these days.
I was genuinely shocked, in a real professional sense, when I discovered that the GLC had made massive incompetent investment in four different mainframe manufacturers, none of whose equipment or software was compatible at that time. The GLC had four huge teams of staff, each pursuing different sorts of machinery and software and trying to carry out different sorts of task. I found that a professional abomination and I was deeply shocked. It was because of the GLC's incompetence that the company for which I was working as a general consultant was called in to do one of the simplest jobs of all—to create a computerised payroll for part of the GLC organisation. Although it appears funny retrospectively, I did not find it amusing at the time when I asked for some software manuals for a particular part of the job and the staff were absolutely astounded. They opened a cupboard, and out fell a load of empty whisky bottles. Such was the enormous competence of the GLC.
Subsequently, when I was in the voluntary agency field, I worked alongside social services department people and I recognised with great sadness the enormous disparity in the level of services that they were able to supply—not, I hasten to add, because of their desire to provide less than efficient services, but because of their incompetence in some areas and in certain parts of the country. There is great disparity in levels of competence. That is where new clause 1 comes in.
In the course of his speech, the hon. Member for Brightside made the discredited comment that every £1 capped equalled £1 of cuts. This has clearly not happened in the past 12 months and never will, given these disparities of service. It presupposes perfect efficiency in every local authority.
Subsection (4)(a) of the new clause demands that the Secretary of State shall specify
an estimate of the additional community charge in the following financial year likely to result from the losses estimated under section (1) above.
In the cases of the seven district councils that I have listed which had charge capping last year and where no cuts resulted, I suggest that the Secretary of State would be offering a nil forecast. He would be offering a nil forecast because capping has meant that councils have been forced to look again at their incompetence and inefficiency and have been forced to tighten their belts.

Mr. Holt: Would my hon. Friend like to speculate what the Labour-controlled authorities would be doing with all


that money that they would have had without charge capping? They have not had to cut any services, so what would they have done if they had managed to get their grubby hands on all that money?

Miss Nicholson: I am very sorry to say that we would have had even higher staff levels in those local authorities and even slower provision of services to the electorate outside. As we all know, when one builds up a so-called core of administration, even with the best well-meaning people, the line between the centre and the elected gets slower and slower in achievement.
I hope that the Minister will consider this seriously. I believe that we should go further than just putting in agency provisions for the delivery of Government services; we should go out to private companies, put them under stringent rules and allow them to provide the services, which they will do at perhaps half the cost incurred by so many of our local authorities at present.
The hon. Member for Brightside suggested—and I wholly support him—that those who take the decisions should be accountable. Those were his very words, but he related those words to the Government. He suggested that those who take the decision to charge-cap should be accountable to the electorate. I suggest that the Conservative philosophy reflects those words in local authority action. The local authority should be accountable. From the Conservative perspective, these caps are only a method of creating local accountability. Indeed, as we have seen from the figures I have read out, this has in some measure already occurred.
The hon. Member cannot say that we tell a lie—that is a word I would not normally use in this place—about enhancing democracy by taking it away. We have, in fact, enhanced democracy. Yes, we have done so with some difficulty; yes, with some elements that I cannot support; and yes, with some points that I know we are already clearing up and others that need further clearing up. Nevertheless, we have increased democracy and we have brought closer to the people of the United Kingdom the decision making which should be theirs alone—the decision making undertaken on their behalf by local authorities. We have given them the ability to call the tune. There has been no gerrymandering of bills and there may have been a misunderstanding of that word.
Finally, I question the still confused thinking that has been displayed by Opposition Members about the operations of local democracy. I was fascinated to see the utter dichotomy, the contradiction in terms, offered by the hon. Member for Brightside when he called both for the removal of SSAs and for the equalisation of local authorities. He is speaking against himself, because the point of SSAs is to equalise the services offered throughout the United Kingdom. One cannot have equalisation of local authorities without some form of redistribution of income, and SSAs offer a moderately simple way of doing that.
Incidentally, I do not necessarily pay tribute to the eternal values of equalisation of services throughout the United Kingdom. I believe that we may have gone too far on that one. Nevertheless, I call into question the hon. Member's illogicality, which I am sure he does not intend, when he offers two opposing aspects and suggests that they reach one solution.

Mr. Illsley: The hon. Lady said that charge capping enhanced democracy and increased accountability. Surely charge capping has done just the opposite. If the Conservative Government had wanted to increase accountability, they would have allowed the electorate to decide on the poll tax bills of the charge-capped authorities. That is the idea of accountability; it is not just a matter of the Government imposing on these local authorities a poll tax which they then have to sell. The hon. Lady also said that SSAs equalise resources. If that is so, why does Manchester get more money to pay for its standard level of services than many other metropolitan districts such as Westminster?

Miss Nicholson: I agree that in a perfect world we could give complete freedom to local authorities to set their own bills and allow complete freedom to the electorate to turn out those local authorities which failed to deliver the services at the sorts of costs people require. However, as the Opposition's Front-Bench spokesman himself said recently, if a Labour Government were in power they would consider keeping some sort of power in reserve for something like a charge-capping exercise.

Mr. Blunkett: rose—

Miss Nicholson: I will give way to the hon. Member when I have finished making this point. The shadow Environment Secretary who was the predecessor to the hon. Member for Brightside said that, in extremis, there must always be that reserve power. He made that statement on Radio 4 on 27 March 1990. The shadow Environment Secretary before him stated in Hansard:
the Labour party's policy makes it clear that what the Government provide to local authorities would, of necessity, be controlled and limited"—[Official Report, 18 February 1988; Vol. 127, c. 1218]
I agree that in a perfect world there would not need to be these controls and limits. I suggest that it is a mere short-term view, simply because of the profligacy of some of the Labour councils which has been so appalling that one shudders to think what the poorer members of society would suffer if these councils were allowed to go full tilt down the road of massive expenditure.

Mr. Blunkett: I simply want to put the record straight, and there is no point in not doing it now. My hon. Friend the Member for Dagenham (Mr. Gould) made it clear that his remarks which the hon. Lady has mentioned, on Radio 4's "Today" programme, referred to propriety and financial probity. The Labour party's position is unequivocal. We will not introduce capping for local revenue raised and spent by a local authority, as distinct from Government grant which in all circumstances has, by its very nature, to be determined by the Government.

Miss Nicholson: The hon. Gentleman tempts me to go a little further down the path, although I had in fact finished. The former shadow Environment Secretary went on to say:
It is really just a hypothetical question to ask us to define what would be extreme circumstances. What I am saying to you—I am not ducking your question in any sense—I am saying in extremis the reserve power would have to be reserved but that it is impossible to say in advance what those circumstances would be".
In other words, the Labour party has no policy. It has failed to recognise honourably and honestly that it is


Labour councils which overspend in a way that is unacceptable to the electorate. Labour councils spend on themselves in terms of their central staffing, central comforts and they do not give to the electorate those things that the electorate deserves.
I cannot support new clause 1 or the Labour party's policy on the community charge. I look to my right hon. Friend the Secretary of State and to his most able Ministers to deliver the right and proper answers within the Conservative philosophy.

Mr. Illsley: I support new clause 1 and, in view of what I said in Committee, I hope to keep my remarks brief.
It is not that some authorities are profligate and overspend; it is simply that the Government have imposed on them standard spending assessments which are deliberately low to force them into a situation where they can easily be charge-capped under the Government's current criteria. In Committee, the Opposition showed clearly that the SSAs bore no relation to the needs of any particular authority.
I was interested to hear the comments of the hon. Member for Torridge and Devon, West (Miss Nicholson) about a newspaper published by the National and Local Government Officers Association which I think she said was produced last September. Barnsley is still making cuts as a result of last year's charge capping of which the newspaper probably would not be aware.
New clause 1 requires the Secretary of State to estimate losses that are likely to be carried forward for the forthcoming year. The formula as it stands in the Bill simply passes the result of any charge capping on to the poll tax payer in the following financial year, and no account is taken of the shortfall despite the fact that that information is available at the time of the charge capping. It is nonsense that the Government should force authorities to issue bills which the Government and the local authorities know are ridiculous because they do not take account of the information that is available to the authority at the time. The public do not want that shortfall being stored up for the following year.
For example, in 1990–91 Barnsley allocated 6 per cent. of its poll tax bill to cover any shortfall in the collection of the tax, and that was detailed on the bill. There is considerable resentment among charge payers in my authority because they are expected to pay £16·97 to cover what they look upon as defaulters. Complaints to me and in the local press are now building up from people who refuse to pay that sum. They will pay the rest of the poll tax bill, but they are not prepared to pay for someone who defaults. They do not realise that similar problems existed under the rating system. That is causing problems for the local authority.
It is not just ordinary working people who object, but the business community as well—perhaps more so. They tend to look on people who are unable to pay as shirkers, just as Conservative Members do, although that is not necessarily the case. One can imagine the disgust of charge payers in my local authority if they had to make up a shortfall of more than 6 per cent. That is simply increasing the number of refusals to pay the poll tax and placing an extra burden on the local authority. People are deciding to pay simply a proportion of the poll tax and to withhold the £16·97. Therefore, my local authority is having to send out extra bills, obtain court orders and all the rest simply because people are refusing to pay that 6 per cent. It shows

that people do not want such sums stored up for the forthcoming year but would far rather have their bills sorted out logically in the current year when the capping is implemented.
If the Secretary of State is required to lay such an estimate of losses, the local authority can identify what it will be required to make up in the following year. It is obviously sensible for a local authority which knows that it will be short on its collection funds to take that into account at the time of capping. It is crazy simply to tell local authorities that, although it is known that they have a 10 per cent. shortfall in their collection funds, nothing can be done about it in June, July, August or September, and it must wait till the following year.
Again, that reflects on the SSAs, which appear not to have been altered to any great extent this year compared with last year. My authority still has the same problems and we shall have similar problems with capping. All we are doing is building up problems for the future. We are simply creating a situation in which authorities that were capped originally will be capped in the future.
New clause I requires the Secretary of State to specify the proposed increase in the charge. I have some sympathy with that because charge payers coming to my surgeries do not want to hear about aggregate external finance or increases in revenue support grant which, incidentally, are about 1·9 per cent. Most of the £3 billion spoken about this year is coming through non-domestic rating, not through increases in Government grant. What they want to know is what the increase will be in pounds, not in percentages here, there and everywhere.
New clause 1 also requires a schedule of reductions in services. Again, I have considerable sympathy with that. I have to laugh when I hear stories about whisky bottles in cupboards and all the rest. It is obvious that some Conservative Members are living in a dream world. My authority comes under the Audit Commission and is regulated by the same legislation as are all other authorities. My authority is a diligent one, which abides by the rules and regulations laid down. Authorities referred to by Conservative Members do not seem to come under the same legislation. Why are not complaints made about those profligate authorities? Some of the stories related by Conservative Members are incredible.
When an authority sets a sensible budget and when treasurers, heads of department and all the rest have spent considerable time determining their budget for the coming year, agonising over it for two or three months, how can they simply cut £10 million off it, as Barnsley was required to do? Which services should be cut? My area was not guilty of high spending and there was no waste, yet cuts had to be made in every department—small cuts here, there and everywhere, except in education, where the cuts were massive. The hon. Member for Torridge and Devon, West, who is no longer in her place, referred to authorities that had not had to make employees redundant as a result of charge capping. I assure her that some education centres in Barnsley were closed as a direct result of charge capping.
It is not good enough for the Government simply to tell a local authority that it is being capped and that, say, £10 million must be taken out of its budget. The Government should be obliged to indicate to the authority how the £10 million might be saved. But they do not do that. They know that some local authorities, such as the


one in my area, simply cannot cut spending without reducing services. They know that authorities, in setting their budgets, have acted responsibly.
It should be remembered that the Manchesters, the Bradfords, the Wandsworths and the Westminsters get double the amount of money that Barnsley gets to provide services at the same level. Why does Manchester get twice as much as the local authority in my area to provide the same services? It is absolutely ridiculous.
The Government are abdicating their responsibility. They do not know where the cuts could be made. They themselves could not do the job. The whole idea of charge capping is a sham, because it is based on the sham standard spending assessment.

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Ms. Dawn Primarolo: I shall try to make my comments brief, as other hon. Members wish to take part in the debate. I shall confine myself to the new clause.
The hon. Member for Torridge and Devon, West (Miss Nicholson) said that those who take decisions should be made accountable. That is exactly what new clause 1 seeks to do. It seeks to make the Government accountable for what they are forcing upon local authorities. If the hon. Lady and her colleagues are so keen on this mechanism, it is odd that they are resisting this new clause, which specifically addresses the fact that the Bill provides the Secretary of State with strengthened powers by giving him the right, in effect, to decide a local authority's poll tax as well as its budget. That is true of all local authorities that the Secretary of State chooses to charge-cap.
This is an ironic twist, bearing in mind what the present Secretary of State for the Environment wrote to The Times in May 1990:
Local authorities should be free to set and account for their own budgets.
But the Government are seeking to take that right away from the local authorities. They know that the task that has been set is impossible, and they do not wish themselves, as the Government, to be held accountable for extremely difficult decisions.
New clause 1 refers specifically to difficulties in respect of the collection fund. It would oblige the Secretary of State to specify the services that a local authority area was likely to lose. If he was unable or was not prepared to identify the cuts, he would be required to specify the deficit that would have to be carried forward and would result in an increase in poll tax in the following financial year. The Government are not prepared to give an estimate or to take into consideration the difficulties that local authorities have to face.
In Bristol, whose council is one of the authorities that the hon. Lady quoted, the Government are requiring a cut of £21 million in the expenditure for next year. Bearing in mind the fact that the total expenditure figure is £62 million, anybody who believes that a reduction of £21 million will be achieved without loss of services and loss of jobs is clearly living in cloud cuckoo land. Let us look at the experience in Bristol this year. Let us consider the information that we should wish the Secretary of State to take into account when identifying cuts. The poll tax is proving to be almost impossible to collect. The Audit Commission, when studying collection and looking at the

collection fund, investigated a number of authorities, of which Bristol city council was one. Thus we have up-to-date information on the problems of that local authority.
In Bristol, administration of the poll tax costs £18·22 per head of the adult population. The Audit Commission estimated that the figure should be £14. The difference is accounted for by the fact that the council had to find new offices for the increased number of staff needed to deal with the poll tax. That has been carried forward. In addition, the authority has to pay the collection charge and giro costs. The administration charge for the rates was £7·35 per head. In addition, as a result of charge capping, court appeals and the endless rebilling that has been necessary—

Mr. Holt: Would the hon. Lady care to say whether she has paid her own charge this year? If not, by how much does she estimate she has burdened other people as a result of failure to conform with the law?

Ms. Primarolo: I intend to apply to myself the discipline of sticking to the new clause, even if other hon. Members cannot do so. I should be happy, at another time and in a relevant debate, to discuss with the hon. Gentleman the invidious effects of the poll tax on my constituents and on many others who are unable to pay. Pensioners, despite an increase in their pensions, are worse off because they have lost even the small amount of relief that was available.

Mr. Holt: Will the hon. Lady give way?

Ms. Primarolo: No. It is well known in this House that I am not frightened by the bullying of hon. Members on the Government Benches. I intend to persist with the speech on new clause 1 that I rose to make. If the hon. Gentleman wishes to have a discussion outside the Chamber, I shall be delighted.
In Bristol, 100,000 people have not paid their poll tax, and in that figure I include those who are in arrears. The local authority is pursuing them in the magistrates court at the rate of 3,000 summonses twice a week for liability orders. That clearly shows that many people find the tax unpayable and that others refuse to pay it. That makes the poll tax uncollectable. Local authorities cannot provide the Government with the information to show how they can comply with the Government's spending directives to balance their books.
There are particular problems in university cities such as Bristol. In such areas problems arise in calculating bills. Even when students pay only 20 per cent. of their bills, the calculation for students in the formula creates problems. Amended bills for students were issued after court action and appeals and they arrived after the academic year had finished. Many people had delayed paying their bills because they were waiting for the outcome of the action and they left the area after the academic year ended. Local authorities cannot trace those people, because that would pose enormous administrative problems and involve great expense.
New clause 1 is straightforward. The Opposition's view of the poll tax is well known. We believe that it is an undemocratic and vile tax and that people's taxes should be based on their ability to pay. The local authority in Bristol will have to take hard decisions to find the £21 million-worth of cuts in services that the Government have directed the authority to make.
If the new clause is accepted, the idea that those who take the decisions should be accountable for them will not be the hollow rhetoric that is normally uttered by the Government. The new clause will make the concept real because the Secretary of State will have to take responsibility for his directives. He will have to specify, when making the orders, how the cuts can be achieved and what services will be lost. Therefore, my constituents will know who is accountable for the cuts in services—the Government.

Mr. Simon Hughes: My colleagues and I will vote in favour of the new clause if it is forced to a vote. We oppose the Bill because we oppose the poll tax. The poll tax is a predictable nonsense. It fails to do the one thing that the Government most wanted it to do because it has not increased accountability, particularly as capping has been introduced. Accountability and capping are contradictory concepts.
No amendment to the poll tax system will lead to accountability. There will be no accountable system until local government is reformed properly. This is not the right occasion to expand in detail on what would make the system accountable. Suffice it to say that we should have a system under which the people who are elected to local government reflect the views of the electorate. In 1982, Islington borough council had 51 Labour members and one non-Labour member when Labour received only 50 per cent. of the vote. That is the greatest distortion of the local government system that I can recall in recent times.
We should have a system of local government that accurately reflects what people want in respect of the political colour of their local authority, and people should pay a reasonable amount according to their ability to pay. I support that concept, and my colleagues and I have taken up the Secretary of State's invitation and we have argued for and answered questions on the concept of local income tax as an alternative to the poll tax. When the whole saga of the poll tax ends, I believe that we will have a local income tax system. That was the proposal put forward by Layfield many years ago; it is the idea that my colleagues and I have supported for a decade or more and it is the proposal put forward by many people who have no political affiliations.
5.15 pm
The aim of the Bill is to plug the Lambeth loophole. If we are to have this system for another year, it is appropriate that we should know the implications of capping in terms of an authority's loss of finance. The amount that a local authority receives and the amount that it loses as a result of poll tax capping is worse under the present system than it was under the rate capping system. Under rate capping, the cap was imposed before the beginning of the financial year, and at least a local authority began in April knowing what its budget was. The present system is nonsense: a local authority sets its budget, begins the financial year and, sometimes months later, through no fault of its own, it is told what it can spend.
In those circumstances, capped authorites such as Southwark have to examine their budgets and cut services. That is nonsense, and it is unjustifiable if we believe that there should be a logical system of financial planning for local authority members or their officers.

Mr. Robin Squire: Does the hon. Gentleman agree that, in contrast to what he has just said, the Government have made it clear in advance what local authorities would need to do in the forthcoming year if they were to be capped? To that extent, much of the uncertainty no longer exists.

Mr. Hughes: I accept that the conditions have been improved. However, the law still permits that a charge cap can, and will, be imposed after April and that might not be exactly on all fours with the predictions and assumptions. However, I accept that the Government have tried to mitigate the effect of an authority being in the dark at the end of March and setting a budget with only a vague idea from on high of what might happen. At least that will be better.
The number of people who do not pay the poll tax is relevant. I understand that the hon. Member for Bristol, South (Ms. Primarolo) has not paid her poll tax. No doubt she will correct me if I am wrong. She avoided answering the intervention of the hon. Member for Langbaurgh (Mr. Holt). However much we may dislike the poll tax, it is unjustifiable for people on a parliamentary salary not to pay the poll tax. Local authorities will spent a lot of money chasing after the poll tax and public money is thereby wasted. By any definition, hon. Members can afford to pay the poll tax, because we are among the best paid in the land. Although we may not like the system, we have not brought the system down by not paying the poll tax. Not paying has simply added to the reduction in services for people who are considerably worse off than anyone in this House.
The Audit Commission stated that in general there are two classes of local authority. In one class there a re authorities with relatively static populations in which collection rates are high. In the other class of authorities, of which Southwark is one, population turnover is high. In Southwark, the population turnover rate is about 25 per cent. a year. Obviously the whole population does not turn round in four years, but about 25 per cent. of the population enter and leave the area every year. In those circumstances, collection of the poll tax is almost impossible. It is impossible to collect the tax in an urban area where there are students, holidaymakers, temporary workers and people who move into temporary housing having been homeless and then going on to more secure accommodation, or who move into private residential accommodation but cannot pay the tax.
Only a couple of people have written to me saying that, despite trying to do so, they cannot pay their poll tax. However, an enormous number of people consider that the first thing they should do when they move house is to let the local authority know their address so that they can get a bill. That is not something that people are instinctively most happy to do. It is unfair to treat local authorities in the same way, no matter what their circumstances are, and to assume that, whatever the local authority, a collection rate of 90 or 95 per cent. will be achieved. The problem is increased if there are linguistic problems such as those in my area where there are many first languages.
People should be in no doubt that the system, and certainly the charge capping system, is the fault of the Government. However—I say this without reservation—matters are often made worse by incompetence in the budgetary planning of local authorities. I shall do what I might be predicted to do, and that is to point out that, in


Southwark, despite my great sympathy for the services that many good officers are trying to deliver, we have had a series of bungles. I shall refer to an example that all hon. Members would be troubled by, and show how money is still appallingly wasted even though we are in incredibly reduced circumstances.
According to Southwark council's finance department, we have an income of about £85 million from rents, and we have rent arrears of about £40 million. Nearly half of this year's rent income is the amount of arrears accumulated from this year and past years. No council can justify a system that does not collect the equivalent of nearly half its annual rent income by way of rents. We have a huge housing stock—the largest in London—but that does not excuse us not getting in the money. There are people in the poverty trap, but quite a lot of that money is either not chased through the housing benefit system or is not chased when people are able to pay.
Half of this week's Southwark Sparrow, a newspaper which is produced every week, contains advertisements for jobs in Southwark council. I make a protest under the local government legislation. The Committee, of which I was a member, suggested that advertisements should be non-political. That suggestion does not appear to be well followed, because I noticed a procession of Labour members—it is a Labour-controlled council—appearing in photographic form. Opposition members appear either not often or not at all.

Miss Joan Lestor: They are not as photogenic as Labour Members.

Mr. Hughes: If the hon. Lady thought that photogenic Labour colleagues would be shown, she would be disappointed. It is not just the quality of the subject matter; it has something to do with the editorial balance of the paper.
In the latest edition of Southwark Sparrow we are told by the chairman of Southwark housing that there are likely to be council rent rises of about £4 in the coming year because of "special repairs". Those repairs are meant to be done under the tenancy agreement. In future, if tenancy agreements are changed, such repairs will not be done, even though tenants are entitled to them under the housing law. They will have to pay £4 extra to get into the position that they should have been in had the job been done in the first place.
I am going to a meeting tonight—I guess that hundreds of people will be there—[Interruption.] I shall not be late. It is not until 8 pm. At that meeting I shall explain why the central heating and hot water systems on the Heygate estate are not working. One answer may be that they have never been maintained properly.
I have never agreed with the abolition of ILEA, and I was sympathetic with Southwark when it took over education. Continuing to pay about £100,000 to teachers who did not exist was a bit of an extravagance. With the best will in the world, the payroll department has been failing to pay some teachers, paying some teachers too much, and paying some teachers their salary but without their London weighting. It hardly leads to a contented work force if the function of the department in terms of delivering a service and paying staff is not working properly.
The bad example is in social services. We have a crisis in Southwark. I do not attribute the inherent crisis to the Labour party. Today we have 100 unallocated child risk registered children without social workers. One thousand people had their home helps taken away as a result of cuts imposed by capping only a few weeks ago. Six day centres will close, not to mention others that already have closed. All those matters are the direct result of impositions on this year's budget, caused by the Government capping Southwark, and they are objectionable for that reason.
That does not excuse, for example, deciding that the only way of dealing with the Oakhaven holiday home for the elderly and disabled in Bexhill was to close and sell it rather than using some imaginative partnership scheme with private money to keep it going. That does not excuse closing the sheltered workshop in Tooley street, rather than looking for a way of developing the site to keep it going. The hon. Members for Peckham (Ms. Harman) and for Dulwich (Mr. Bowden) joined me in an all-party alliance to make our point to the council only this week.
It also does not excuse suddenly, without any consultation with the users or their families let alone with the staff, announcing that all the 27 sheltered housing units will have no resident wardens as from next month. Therefore, vulnerable people will be able only to ring a bell at the weekend or at night. Some of them are in their 80s and 90s, some of them are in wheelchairs, and some of them have walking frames. Some of them are terrified and have written letters threatening suicide.
Such financial management, even under pressure, is inexcusable. I understand, therefore, why a Government should say, "Put your house in order; only then will we help you."
The worst example is that Southwark, a charge-capped Labour borough, which is desperately short of money and which cut 1,000 people's home helps, announced that the deputy chief executive's salary would go up to £70,000, which is more than the Prime Minister's salary. However good the deputy chief executive might be at his job, I do not think that suddenly increasing his salary by between £25,000 and £30,000 is acceptable. I certainly do not think that it is acceptable when it appeared to be the decision of what is called the urgency sub-committee, which is two people meeting in a hole in the corner. To be fair, even the Labour group was somewhat unhappy at being told that the deputy chief executive had had a salary increase that was approved by the leader of the council and one of her colleagues.
If we are serious about pleading for the needs of an inner-city authority, as we should be, we must be serious about making sure that we do not make stupid decisions. Credible local government meeting the desperate needs of inner-city people—we need millions of pounds for housing, social services and all other local government services, and we need all the money that we are meant to have—is not enhanced or helped by the local authority regularly scoring own goals and wasting millions of pounds that are not its to waste.
I shall vote for the new clause. When the Government impose charge caps, we should know what the direct implication is. I sincerely hope that the Government realise that this exercise, which was meant to bring about accountability, has not done so because it was fundamentally never likely to do it. It was meant to bring


about efficiency, but it has not done that either. It has brought hardship but not efficiency. Until we have a new system, we will not get either right.

Mr. Holt: Middlesbrough borough council is well known for its Labour bosses, who never have an original idea among them. They look slavishly around to see what is happening elsewhere and try to follow suit whenever possible. They hit on the Lambeth position. When they were examining their budgets, ostensibly to achieve the figures laid down by the Government, they cynically and deliberately failed to balance them so that they could make a special, Lambeth-type plea. The Bill is intended to stop that, and that is why I support it.
We shall tell local authorities such as Middlesbrough not to flout the law of the land but to make the necessary cuts. The cuts can easily be made. If the Labour party finds it difficult, it can hand over control to the Conservatives and we shall show them how to do it without any reduction in services. We shall give the people of Middlesbrough value for money.
As my hon. Friend the Minister will be aware, the inefficiency of Middlesbrough borough council was well highlighted by its failure to apply in time and correctly for concessionary television licences for elderly residents in my constituency. As a consequence, those elderly residents have lost their concessionary television licence for ever because there was a vesting date by which the applications had to he put in correctly. The clerical staff and the managers who were supposed to supervise them simply failed to apply in time.
If my hon. Friend the Minister is approached by Middlesbrough borough council asking him to waive the capping rules he should not do so, because the authority wastes money as if there were no tomorrow.

Miss Lestor: My constituency of Eccles is in the city of Salford, a predominantly Labour council for many years, operating in an atmosphere of long-term unemployment and a great deal of social deprivation. No Secretary of State has yet called us inefficient or accused us of overspending. Yet in that atmosphere in my local authority, two or three matters must be brought home to the Secretary of State and those who oppose the new clause.
The cost of collecting and administering the poll tax and the non-domestic rate in Salford is £3·5 million, compared with £1·5 million in 1988–89 for the collection of the general rate. That represents £12 on every poll tax bill, assuming that everyone in the area is paying the full poll tax. Although our record of collection is good in Salford, many people are not paying the full poll tax for a variety of reasons.
Of that £3·5 million, £3 million is for collection. The treasury department has taken on an extra 75 people to administer the collection of the poll tax. The number of staff has increased from 52 to 127. The housing benefit department has taken on another 33 people to administer housing benefit properly. Of course, all those people have to be paid. That is all part of the cost of administering the poll tax.
When the Government talk about extending democracy to local government it would make me laugh if it were not so tragic. In Salford, as in many other areas, we must avoid being capped because that would be disastrous. We must

increase the poll tax, not to keep or provide extra services but to pay for the administration of the poll tax. The hon. Member for Torridge and Devon, West (Miss Nicholson) does not know what she is talking about when she speaks about services. She ran away almost as soon as she had finished speaking. We have had to employ extra people to administer the poll tax and also pay for computers and other equipment that we would not have needed otherwise.
In other words, to avoid being poll tax capped and to pay the extra costs of administration we have to increase the poll tax but cut services. If we increased the poll tax and increased services, we would be in danger of being capped. That is a monstrous position for any local authority, yet that is precisely our position and that of many local authorities throughout Britain.
The hon. Member for Torridge and Devon, West asked what local authorities would have done with the extra revenue if they had not been poll tax-capped. The hon. Member for Southwark and Bermondsey (Mr. Hughes) mentioned some omissions in local authority services in his constituency. Councils cannot provide certain services.
The Government entirely ignore the social consequences of the poll tax. Many people in my constituency have to make a choice between buying their children shoes or paying their poll tax. Hundreds of people's poll tax bills are much bigger than their bill for the general rates. No one has ever taken into account how such people are supposed to balance their budgets.
The hon. Member for Torridge and Devon, West and others often talk about cuts and wasteful authorities. The House constantly, in many instances rightly, passes legislation that imposes a charge on local authorities. Last year, I sat on the Standing Committee that considered the Children Bill. The Children Act 1990 is going out to local authorities with certain guidelines. It is estimated that administering that Act alone, which is intended to protect our children, will cost local authorities on average about £500,000 a year. How are local authorities to do it? How are they to employ the extra staff needed if they are in danger of being poll tax capped?
The hon. Member for Southwark and Bermondsey gave other examples. It is not only in London or Southwark that hundreds of children on the at-risk register have no social worker attached to them. That happens throughout the country. Inner-city social services are bursting at the seams because they have improved their techniques for identifying children at risk and detecting child abuse but cannot allocate people to protect such children.
We pass legislation and say to local authorities, "Here you are. Get on with it." We all support legislation such as the Children Act 1990, but there is no money to implement it.

Mr. Simon Hughes: The hon. Lady and I agree that one thing that we should do is state at the beginning of every Bill that comes to the House the cost and manpower implications not to only the national Treasury but to local authorities to implement what we instruct them to do. If we did that and guaranteed funding for local authorities every time we gave them a new job, we should have a fairer and more just system.

Miss Lestor: The hon. Gentleman makes a point that I intended to make and I shall conclude on that note. Conservative Members do not calculate and take no


interest in the cost implications for local authorities of the legislation that they pass. The Children Act 1990 cannot be properly implemented unless capping of local authorities is stopped and more resources are made available.
In my area and throughout the country services will be cut, poll tax bills will increase and there will be no improvement in services to local people who will pay higher bills to meet the administrative costs. That is what is wrong with the poll tax and with the argument that it increases democracy. From the start, poll tax bills and their consequences have been controlled by central Government, who seek to make local authorities pay the price in terms of electoral representation.

Mr. William O'Brien: I shall not detain the House too long, but we should put the record straight. The debate has shown that Conservative Members oppose local government, whereas the Opposition have confidence in local government and want to see it provide the services that people demand and expect. New clause 1 asks that the Secretary of State
lay before Parliament an estimate of the losses likely to be incurred to the collection fund of any authority referred to in such an order
where poll tax capping would take place.
The hon. Member for Torridge and Devon, West (Miss Nicholson) criticised local government extensively. She was a member of the Standing Committee that considered the Bill in detail, yet she did not speak one word during its proceedings. She had many opportunities to make her comments in Committee because we had a similar debate to this one. It is a pity that she did not, because that would have allowed us to debate the issue. However, she declined to take that opportunity. Even tonight, she left the Chamber to prevent us from putting the matter straight. She did not address some of the problems that face local government.
The hon. Lady did not mention the reductions in the rate support grant that have been imposed in the 11 years of this Government and which have severely restricted the ability of local authorities to provide services. She read from a publication that said that there would be no cuts in services, but she did not address that report to rate-capped authorities. She did not mention that some local authorities are likely to be in deficit at the end of this year because some of the changes that have been made were implemented halfway through the local authority financial year.
The hon. Lady acted unfairly by leaving the Chamber, as that did not allow us to explain some of the problems faced by local authorities. The hon. Lady said that the purpose of the poll tax was to equalise services throughout local authorities. She omitted to say, however, that the formula used by the Government and the Secretary of State to decide that level of services is more than 10 years old. In that time, tremendous changes have affected local government and its services. The present system allows the Secretary of State to attempt to equalise services on the basis of a 10-year-old formula. That is what is wrong with local government. It is being judged on an outdated formula. It is time that the Government updated it to achieve fairness and justice for local government.
The hon. Member for Langbaurgh (Mr. Holt) criticised Middlesbrough authority. It is fair to point out, however,

that it is the electorate of that area who vote for the constitution of that authority. Under our democratic system, such votes demonstrate that the people are satisfied with their representatives and the decisions they have reached. That is the democratic system for which we fight and in which we believe. Therefore, we should take note of the decisions of the local electorate.

Mr. Simon Hughes: Obviously, the hon. Gentleman's assertion that the system by which we elect an authority is democratic is not right. There is some dispute about that, and many people—including many in his party—believe that, because of the nature of the electoral system, people end up with an unrepresentative group.

Mr. O'Brien: I shall not go down that avenue, although I could take the hon. Gentleman to task over some of the principles of the voting procedure in which the Liberal Democrats profess to believe.
I want to explain the aims of the new clause. It requires the Secretary of State to inform local authorities about the effects of setting the substitute poll tax using the formula in the Bill. He should explain that that substitute will affect the following year's poll tax. I hope that hon. Members take note of the purpose of the amendment.

Mr. Holt: In the past 10 years, the population of Middlesbrough has fallen dramatically, but the formula has remained unchanged. I believe that that is right, because if the payments were not based on the old formula, Middlesbrough authority would not receive as much money as it does and the need to cap it would be even greater.

Mr. O'Brien: The hon. Gentleman illustrates the misleading view of the formula held by Conservative Members. Even if there was a reduction in population, highways would need to be maintained and services provided. The equalisation of services should be provided for in the formula. The Tories have got it all wrong regarding the formula needed for local government to work efficiently. That is why my hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) said that the Labour party would not introduce capping, but would have a fairer system of assessing the need for the equalisation of services throughout the country. That is Labour party policy on local government.
If Conservative Members consider the principles behind the new clause and if they have any thought for local government and the services they provide, they must give it their blessing. We shall divide the House on the new clause, and I appeal to Conservative Members in particular to support it.

Mr. Key: My hon. Friend the Minister for Local Government and Inner Cities apologises to the House for his absence, but he has been called away to an important meeting. However, he will be back in time for Third Reading.
By tabling the new clause, the Opposition, once again, set out to perpetuate the myth that the Bill will in some way cause authorities to incur a deficit on the collection fund. The Opposition repeat that assertion now, despite our lengthy discussions in Committee about it. They believe that the formula in the Bill radically changes the position of the charging authorities concerned by


preventing them from increasing the allowance they made for non-collection when they first set their charges for the year. That is simply not the case. It is also not true that the Bill would require capped authorities to make further budget cuts to allow for non-collection in addition to those required by capping.
As I made clear in Committee, the Opposition's arguments are based on a false premise. There is a statutory requirement for an authority to balance its books when setting the charges at the start of the year. The Bill does not change that. All authorities must make their best estimate of income and expenditure at the beginning of the year and live with the consequences. An authority's actual income and expenditure are bound to differ somewhat from its estimate, so, at the end of the year, its collection fund will be in surplus or deficit. If the actual number of charge payers is lower than the authority estimated when setting its charge, the actual income will be less than estimated and a deficit will ensue.
No authority can increase its charges part way through the year just because it realises that it got its estimates wrong. The statutory arrangements are such that any deficit must be allowed for when setting next year's charges. All authorities are in the same boat. The Bill simply guarantees that capped authorities are firmly kept in that boat.

Mr. Illsley: rose—

Mr. Key: I would rather make progress than give way; that will enable me to answer the points made by the hon. Gentleman and others.
The Opposition persist in believing that a capped authority is, in some way, disadvantaged by the fact that the formula deliberately prevents it from changing its non-collection allowance. I firmly reject that. The whole point behind the formula is to ensure that charge payers in such authorities are not disadvantaged by a repetition of the antics in which Lambeth indulged this year.
It is a pleasure to be back with the hon. Member for Sheffield, Brightside (Mr. Blunkett). He referred to his long-suffering friend, Offa. I, too, have a long-suffering friend called Tigger. I suggest that Offa should come to dinner with Tigger. While they are eating, we could discuss, without any preconditions, the possible reforms that the hon. Gentleman might like to make to the community charge.
The hon. Gentleman said that Lambeth would not send out its bill by 1 April because of the Secretary of State's decision to cap the authority. However, the hon. Gentleman misunderstands the capping process. The statutory position is clear—each charging authority must set its charge by 1 April and send out bills as soon as reasonably practicable thereafter. That process should continue irrespective of capping. Charge payers must pay the charge as originally set until, if there is capping, the revised substitute charge has been set.
As I said in Committee, when Lambeth people went to the polls in May, they knew that the council had been designated for capping because, in the Secretary of State's opinion, its budget was excessive. Lambeth knew that the Secretary of State had proposed to cut £8·8 million, or £51 per adult. Those people trooped off and voted because they believed what the Labour party said. They expected their charges to be below £500, but we all know that, in the event, that did not happen. What did it do after cutting its

budget? It reduced the charge to £52l·63. The Labour party cheated its electorate. That was the problem with Lambeth.
In March, when Lambeth set its original charge for the year, it used an estimate of non-collection—the number of people liable to pay who do not do so—of 10 per cent. In August, when the council reset its charge following capping, it increased its estimate to 15 per cent. The effect of the change was to deny the Lambeth charge payer about £29 of the reduction implied by the cuts in its budget.

Mr. Tracey: My hon. Friend probably knows this from his records. I have some Chartered Institute of Public Finance and Accountancy figures showing that, in the last recorded year of rate collection, Lambeth council had £33 million of rate arrears. That amounted to almost 20 per cent. That shows how Lambeth has effectively been trying to cook its books in front of its electors.

Mr. Key: My hon. Friend is right. The Audit Commission had a great deal to say about Lambeth and about the fact that the council was sending bills to addresses outside the borough, to people who did not exist and, in some cases, to the same people four times over. I know that Opposition Members find it embarrassing to have to defend Lambeth, so I shall move on to the contributions made by other hon. Members.
My hon. Friend the Member for Torridge and Devon, West (Miss Nicholson) made a forceful speech, in which she made it clear that capping does not necessarily lead to job cuts. She is absolutely right. She referred in particular to computer software. I can assure the House that we are conscious of the computer implications of our policy decisions. As my right hon. Friend the Secretary of State said on 17 January, in the context of the community charge reduction scheme, we have tried to have regard to local government computer software programmes and have confined the changes that we have made to those likely to have the least effect on the costs that will result.
My hon. Friend also referred to gerrymandering. I did not think that I would see the day when poor "Mr. Gerry Mander" was dragged into our debates on this little Bill. I do not know whether the hon. Member for Brightside has been to pay homage, as I have, to the tomb of Mr. Gerry—a delightful tomb in Marblehead in Boston in the United States. It is worth a visit. I do not think that we can blame Mr. Gerry Mander for anything that has happened in the House today.
The hon. Member for Barnsley, Central (Mr. Illsley) made an interesting speech in which he talked about the difficulties surrounding the standard spending assessments. A charge that is often made against us is that it is unfair that one authority should have a different SSA from another. That is particularly so when hon. Members perceive that neighbouring constituencies have more money. The whole point of the SSA system—which is well established—is that the criteria apply equally right across the country.
The hon. Member for Barnsley, Central mentioned non-payment. A non-collection estimate has to be made when setting a charge for the future year. In the case of Barnsley, it was 6 per cent., representing an extra £16·79 on the charge. I understand why people in Barnsley resent having to pay more merely because some people refuse to pay the charge. Non-payment denies councils funds and


shifts the burden onto those who pay. We have given local authorities wide-ranging enforcement powers to help them to keep their charges down.
I should not omit the hon. Member for Bristol, south (Ms. Primarolo). Bristol is a fine city—a proud and ancient city—and I do not think that it will consider itself well served in this place by someone who will not pay the poll tax, who is leading a community protest and who is proud that 100,000 citizens are not paying their taxes. I hope that all the hon. Lady's constituents realise, when their bills drop through the letterbox, that they are paying for her.
The hon. Member for Southwark and Bermondsey (Mr. Hughes) made an interesting constituency speech. We welcome the contribution that the Liberal Democrats have made to our discussion of the review of local government finance and structure. We had a most constructive meeting with the hon. Member for Berwick-upon-Tweed (Mr. Beith) and look forward to the next meeting. I only wish that we could have such a constructive dialogue with the official Opposition.
As always, my hon. Friend the Member for Langbaurgh (Mr. Holt) made a spirited speech. He made the important point that value for money also means value for people. I sometimes think that Labour authorities find that hard to understand and to stomach.
The hon. Member for Eccles (Miss Lestor) has a fine local authority in the fine city of Salford. Some people say that Salford is overshadowed by Manchester. I think that anyone who knows Salford will be able to differentiate between the two cities and I therefore respect what the hon. Lady said. I shall treat her speech as a submission to our review.
The hon. Member for Normanton (Mr. O'Brien) talked about local government expenditure. His remarks took my breath away. He spoke as if local authorities were impoverished institutions that were constantly having their budget slashed by a wicked Government unwilling to enable them to carry out their functions. Local authority spending has increased by 25 per cent. in just two years, yet the Opposition would have us believe that it will be necessary to increase local authority spending by 50 per cent. in three years. That is absolute nonsense. This year alone, an extra £3 billion is going into local government. I suspect that if the Opposition had their way, it could be £30 billion, £300 billion or £3,000 billion and it would still not be considered sufficient.

Mr. O'Brien: I referred to the Government's cuts in rate support grant. What is the Minister attitude to that question?

Mr. Key: I shall be delighted to answer that and so illustrate the fact that the hon. Gentleman does not understand local government finance. As he well knows, one has to consider aggregate external finance, which includes rate support grant, non-domestic rates and what the charge payer contributes. Aggregate external financing has increased year after year, with the injection of an extra £3 billion this year alone. The plain fact is that there is no reason why capped authorities should have the opportunity, not available to other authorities to look again at their non-collection estimates.
The new clause is misconceived in principle. It has no bearing on the purpose of the Bill, which is to protect

charge payers by guaranteeing that the budget reductions achieved by capping feed through in full to lower charges. I call on the House to reject it.

Question put, That the clause be read a Second time:—

The House divided: Ayes 231, Noes 341.

Division No. 44]
[5.57 pm


AYES


Abbott, Ms Diane
Fisher, Mark


Adams, Mrs. Irene (Paisley, N.)
Flynn, Paul


Allen, Graham
Foot, Rt Hon Michael


Alton, David
Forsythe, Clifford (Antrim S)


Anderson, Donald
Foster, Derek


Archer, Rt Hon Peter
Foulkes, George


Armstrong, Hilary
Fraser, John


Ashdown, Rt Hon Paddy
Fyfe, Maria


Ashley, Rt Hon Jack
Garrett, John (Norwich South)


Banks, Tony (Newham NW)
Garrett, Ted (Wallsend)


Barnes, Harry (Derbyshire NE)
George, Bruce


Barnes, Mrs Rosie (Greenwich)
Gilbert, Rt Hon Dr John


Barron, Kevin
Godman, Dr Norman A.


Battle, John
Golding, Mrs Llin


Beckett, Margaret
Gordon, Mildred


Beggs, Roy
Gould, Bryan


Beith, A. J.
Graham, Thomas


Bell, Stuart
Grant, Bernie (Tottenham)


Benn, Rt Hon Tony
Griffiths, Win (Bridgend)


Bennett, A. F. (D'nt'n &amp; R'dish)
Grocott, Bruce


Benton, Joseph
Hardy, Peter


Blair, Tony
Harman, Ms Harriet


Blunkett, David
Hattersley, Rt Hon Roy


Boateng, Paul
Heal, Mrs Sylvia


Boyes, Roland
Healey, Rt Hon Denis


Bradley, Keith
Henderson, Doug


Bray, Dr Jeremy
Hinchliffe, David


Brown, Gordon (D'mline E)
Hoey, Ms Kate (Vauxhall)


Brown, Nicholas (Newcastle E)
Hogg, N. (C'nauld &amp; Kilsyth)


Bruce, Malcolm (Gordon)
Home Robertson, John


Buckley, George J.
Hood, Jimmy


Caborn, Richard
Howarth, George (Knowsley N)


Campbell, Menzies (Fife NE)
Howells, Geraint


Campbell-Savours, D. N.
Howells, Dr. Kim (Pontypridd)


Canavan, Dennis
Hoyle, Doug


Carlile, Alex (Mont'g)
Hughes, John (Coventry NE)


Cartwright, John
Hughes, Robert (Aberdeen N)


Clark, Dr David (S Shields)
Hughes, Roy (Newport E)


Clarke, Tom (Monklands W)
Hughes, Simon (Southwark)


Clay, Bob
Illsley, Eric


Clelland, David
Ingram, Adam


Clwyd, Mrs Ann
Janner, Greville


Cohen, Harry
Jones, Barry (Alyn &amp; Deeside)


Cook, Robin (Livingston)
Jones, Martyn (Clwyd S W)


Corbett, Robin
Kaufman, Rt Hon Gerald


Corbyn, Jeremy
Kennedy, Charles


Cousins, Jim
Kinnock, Rt Hon Neil


Crowther, Stan
Kirkwood, Archy


Cryer, Bob
Lambie, David


Cummings, John
Lamond, James


Cunliffe, Lawrence
Leadbitter, Ted


Cunningham, Dr John
Leighton, Ron


Dalyell, Tam
Lestor, Joan (Eccles)


Darling, Alistair
Lewis, Terry


Davies, Ron (Caerphilly)
Litherland, Robert


Davis, Terry (B'ham Hodge H'I)
Lloyd, Tony (Stretford)


Dewar, Donald
Lofthouse, Geoffrey


Dixon, Don
Loyden, Eddie


Dobson, Frank
McAllion, John


Doran, Frank
McAvoy, Thomas


Douglas, Dick
McCartney, Ian


Dunwoody, Hon Mrs Gwyneth
Macdonald, Calum A.


Eadie, Alexander
McFall, John


Evans, John (St Helens N)
McKay, Allen (Barnsley West)


Ewing, Harry (Falkirk E)
McKelvey, William


Ewing, Mrs Margaret (Moray)
McLeish, Henry


Fatchett, Derek
Maclennan, Robert


Faulds, Andrew
McMaster, Gordon


Fearn, Ronald
McWilliam, John


Field, Frank (Birkenhead)
Madden, Max


Fields, Terry (L'pool B G'n)
Maginnis, Ken






Mahon, Mrs Alice
Rowlands, Ted


Marek, Dr John
Ruddock, Joan


Marshall, David (Shettleston)
Sedgemore, Brian


Marshall, Jim (Leicester S)
Sheerman, Barry


Martin, Michael J. (Springburn)
Sheldon, Rt Hon Robert


Martlew, Eric
Shore, Rt Hon Peter


Maxton, John
Sillars, Jim


Meacher, Michael
Skinner, Dennis


Meale, Alan
Smith, Andrew (Oxford E)


Michael, Alun
Smith, C. (Isl'ton &amp; F'bury)


Michie, Bill (Sheffield Heeley)
Smith, Rt Hon J. (Monk'ds E)


Michie, Mrs Ray (Arg'l &amp; Bute)
Smith, J. P. (Vale of Glam)


Mitchell, Austin (G't Grimsby)
Smyth, Rev Martin (Belfast S)


Moonie, Dr Lewis
Soley, Clive


Morgan, Rhodri
Spearing, Nigel


Morley, Elliot
Steel, Rt Hon Sir David


Morris, Rt Hon A. (W'shawe)
Steinberg, Gerry


Morris, Rt Hon J. (Aberavon)
Stott, Roger


Mowlam, Marjorie
Strang, Gavin


Mullin, Chris
Straw, Jack


Murphy, Paul
Taylor, Mrs Ann (Dewsbury)


Nellist, Dave
Taylor, Matthew (Truro)


Oakes, Rt Hon Gordon
Thomas, Dr Dafydd Elis


O'Brien, William
Thompson, Jack (Wansbeck)


O'Hara, Edward
Turner, Dennis


O'Neill, Martin
Vaz, Keith


Orme, Rt Hon Stanley
Walker, A. Cecil (Belfast N)


Owen, Rt Hon Dr David
Wallace, James


Parry, Robert
Walley, Joan


Patchett, Terry
Wardell, Gareth (Gower)


Pendry, Tom
Wareing, Robert N.


Pike, Peter L.
Welsh, Andrew (Angus E)


Powell, Ray (Ogmore)
Welsh, Michael (Doncaster N)


Prescott, John
Wigley, Dafydd


Primarolo, Dawn
Williams, Rt Hon Alan


Quin, Ms Joyce
Williams, Alan W. (Carm'then)


Radice, Giles
Wilson, Brian


Randall, Stuart
Winnick, David


Redmond, Martin
Wise, Mrs Audrey


Rees, Rt Hon Merlyn
Worthington, Tony


Reid, Dr John
Wray, Jimmy


Richardson, Jo
Young, David (Bolton SE)


Robertson, George



Rogers, Allan
Tellers for the Ayes:


Rooker, Jeff
Mr. Frank Haynes and


Rooney, Terence
Mr. Ken Eastham.


Ross, Ernie (Dundee W)



NOES


Aitken, Jonathan
Brazier, Julian


Alexander, Richard
Bright, Graham


Alison, Rt Hon Michael
Brooke, Rt Hon Peter


Allason, Rupert
Brown, Michael (Brigg &amp; Cl't's)


Amess, David
Bruce, Ian (Dorset South)


Amos, Alan
Buchanan-Smith, Rt Hon Alick


Arbuthnot, James
Budgen, Nicholas


Arnold, Jacques (Gravesham)
Burns, Simon


Aspinwall, Jack
Burt, Alistair


Baker, Nicholas (Dorset N)
Butler, Chris


Baldry, Tony
Butterfill, John


Banks, Robert (Harrogate)
Carlisle, John, (Luton N)


Batiste, Spencer
Carlisle, Kenneth (Lincoln)


Bellingham, Henry
Carrington, Matthew


Bendall, Vivian
Carttiss, Michael


Bennett, Nicholas (Pembroke)
Cash, William


Bevan, David Gilroy
Channon, Rt Hon Paul


Biffen, Rt Hon John
Chapman, Sydney


Blaker, Rt Hon Sir Peter
Chope, Christopher


Body, Sir Richard
Churchill, Mr


Bonsor, Sir Nicholas
Clark, Rt Hon Alan (Plymouth)


Boscawen, Hon Robert
Clark, Dr Michael (Rochford)


Boswell, Tim
Clark, Sir W. (Croydon S)


Bottomley, Peter
Clarke, Rt Hon K. (Rushcliffe)


Bottomley, Mrs Virginia
Colvin, Michael


Bowden, A (Brighton K'pto'n)
Conway, Derek


Bowden, Gerald (Dulwich)
Coombs, Anthony (Wyre F'rest)


Bowis, John
Coombs, Simon (Swindon)


Boyson, Rt Hon Dr Sir Rhodes
Cope, Rt Hon John


Braine, Rt Hon Sir Bernard
Couchman, James


Brandon-Bravo, Martin
Cran, James





Critchley, Julian
Irvine, Michael


Currie, Mrs Edwina
Irving, Sir Charles


Curry, David
Jack, Michael


Davies, Q. (Stamf'd &amp; Spald'g)
Jackson, Robert


Davis, David (Boothferry)
Janman, Tim


Day, Stephen
Jessel, Toby


Devlin, Tim
Johnson Smith, Sir Geoffrey


Dickens, Geoffrey
Jones, Robert B (Herts W)


Dicks, Terry
Kellett-Bowman, Dame Elaine


Dorrell, Stephen
Key, Robert


Douglas-Hamilton, Lord James
King, Roger (B'ham N'thfield)


Dover, Den
King, Rt Hon Tom (Bridgwater)


Dunn, Bob
Kirkhope, Timothy


Dykes, Hugh
Knapman, Roger


Eggar, Tim
Knight, Greg (Derby North)


Emery, Sir Peter
Knight, Dame Jill (Edgbaston)


Evans, David (Welwyn Hatf'd)
Knowles, Michael


Evennett, David
Lang, Ian


Fairbairn, Sir Nicholas
Latham, Michael


Fallon, Michael
Lawrence, Ivan


Favell, Tony
Lee, John (Pendle)


Fenner, Dame Peggy
Leigh, Edward (Gainsbor'gh)


Field, Barry (Isle of Wight)
Lennox-Boyd, Hon Mark


Fishburn, John Dudley
Lester, Jim (Broxtowe)


Fookes, Dame Janet
Lilley, Peter


Forman, Nigel
Lloyd, Sir Ian (Havant)


Forsyth, Michael (Stirling)
Lloyd, Peter (Fareham)


Forth, Eric
Lord, Michael


Fowler, Rt Hon Sir Norman
Luce, Rt Hon Sir Richard


Fox, Sir Marcus
McCrindle, Sir Robert


Franks, Cecil
Macfarlane, Sir Neil


Freeman, Roger
MacGregor, Rt Hon John


French, Douglas
MacKay, Andrew (E Berkshire)


Fry, Peter
Maclean, David


Gale, Roger
McLoughlin, Patrick


Gardiner, Sir George
McNair-Wilson, Sir Patrick


Garel-Jones, Tristan
Madel, David


Gill, Christopher
Malins, Humfrey


Gilmour, Rt Hon Sir Ian
Mans, Keith


Glyn, Dr Sir Alan
Marland, Paul


Goodhart, Sir Philip
Marlow, Tony


Goodlad, Alastair
Marshall, John (Hendon S)


Gorman, Mrs Teresa
Marshall, Sir Michael (Arundel)


Gorst, John
Martin, David (Portsmouth S)


Grant, Sir Anthony (CambsSW)
Mates, Michael


Greenway, Harry (Ealing N)
Maude, Hon Francis


Greenway, John (Ryedale)
Maxwell-Hyslop, Robin


Gregory, Conal
Mayhew, Rt Hon Sir Patrick


Grist, Ian
Mellor, Rt Hon David


Ground, Patrick
Miller, Sir Hal


Grylls, Michael
Mills, Iain


Gummer, Rt Hon John Selwyn
Mitchell, Andrew (Gedling)


Hague, William
Mitchell, Sir David


Hamilton, Hon Archie (Epsom)
Moate, Roger


Hamilton, Neil (Tatton)
Monro, Sir Hector


Hampson, Dr Keith
Montgomery, Sir Fergus


Hannam, John
Morris, M (N'hampton S)


Hargreaves, A. (B'ham H'll Gr')
Morrison, Sir Charles


Hargreaves, Ken (Hyndburn)
Morrison, Rt Hon Sir Peter


Harris, David
Moss, Malcolm


Haselhurst, Alan
Mudd, David


Hayes, Jerry
Needham, Richard


Hayhoe, Rt Hon Sir Barney
Neubert, Sir Michael


Hayward, Robert
Newton, Rt Hon Tony


Heseltine, Rt Hon Michael
Nicholls, Patrick


Hicks, Mrs Maureen (Wolv' NE)
Nicholson, David (Taunton)


Hicks, Robert (Cornwall SE)
Nicholson, Emma (Devon West)


Higgins, Rt Hon Terence L.
Norris, Steve


Hill, James
Onslow, Rt Hon Cranley


Hind, Kenneth
Oppenheim, Phillip


Hogg, Hon Douglas (Gr'th'm)
Page, Richard


Holt, Richard
Paice, James


Hordern, Sir Peter
Parkinson, Rt Hon Cecil


Howard, Rt Hon Michael
Patten, Rt Hon Chris (Bath)


Howarth, Alan (Strat'd-on-A)
Patten, Rt Hon John


Howarth, G. (Cannock &amp; B'wd)
Pawsey, James


Howell, Rt Hon David (G'dford)
Peacock, Mrs Elizabeth


Hughes, Robert G. (Harrow W)
Porter, Barry (Wirral S)


Hunt, David (Wirral W)
Porter, David (Waveney)


Hunter, Andrew
Portillo, Michael






Powell, William (Corby)
Tapsell, Sir Peter


Price, Sir David
Taylor, Ian (Esher)


Raffan, Keith
Taylor, John M (Solihull)


Raison, Rt Hon Sir Timothy
Taylor, Teddy (S'end E)


Rathbone, Tim
Tebbit, Rt Hon Norman


Redwood, John
Temple-Morris, Peter


Renton, Rt Hon Tim
Thompson, D. (Calder Valley)


Rhodes James, Robert
Thompson, Patrick (Norwich N)


Riddick, Graham
Thorne, Neil


Ridley, Rt Hon Nicholas
Thornton, Malcolm


Ridsdale, Sir Julian
Thurnham, Peter


Roberts, Sir Wyn (Conwy)
Townsend, Cyril D. (B'heath)


Roe, Mrs Marion
Tracey, Richard


Rossi, Sir Hugh
Tredinnick, David


Rost, Peter
Trippier, David


Rowe, Andrew
Trotter, Neville


Rumbold, Rt Hon Mrs Angela
Twinn, Dr Ian


Ryder, Richard
Vaughan, Sir Gerard


Sainsbury, Hon Tim
Viggers, Peter


Sayeed, Jonathan
Wakeham, Rt Hon John


Shaw, David (Dover)
Waldegrave, Rt Hon William


Shaw, Sir Giles (Pudsey)
Walden, George


Shelton, Sir William
Walker, Bill (T'side North)


Shephard, Mrs G. (Norfolk SW)
Waller, Gary


Shepherd, Colin (Hereford)
Walters, Sir Dennis


Shepherd, Richard (Aldridge)
Ward, John


Shersby, Michael
Wardle, Charles (Bexhill)


Sims, Roger
Warren, Kenneth


Skeet, Sir Trevor
Watts, John


Smith, Sir Dudley (Warwick)
Wells, Bowen


Smith, Tim (Beaconsfield)
Wheeler, Sir John


Soames, Hon Nicholas
Whitney, Ray


Speed, Keith
Widdecombe, Ann


Speller, Tony
Wiggin, Jerry


Spicer, Sir Jim (Dorset W)
Wilkinson, John


Spicer, Michael (S Worcs)
Wilshire, David


Squire, Robin
Winterton, Mrs Ann


Stanbrook, Ivor
Winterton, Nicholas


Stanley, Rt Hon Sir John
Wolfson, Mark


Steen, Anthony
Wood, Timothy


Stern, Michael
Woodcock, Dr. Mike


Stevens, Lewis
Yeo, Tim


Stewart, Allan (Eastwood)
Young, Sir George (Acton)


Stewart, Andy (Sherwood)
Younger, Rt Hon George


Stewart, Rt Hon Ian (Herts N)



Stokes, Sir John
Tellers for the Noes:


Sumberg, David
Mr. Irvine Patnick and


Summerson, Hugo
Mr. Tom Sackville.

Question accordingly negatived.

New Clause 2

CERTIFICATION OF STATUTORY DUTIES

'()(1) Sections 1 to 5 below shall have effect subject to the making of an Order under section 6(1), and no such Order shall be made in respect of the first year before the fulfilment of the requirements of this section.

(2) Before making any Order in respect of the first year under section 6(1) below, and annually thereafter, the Secretary of State shall for the purposes of subsection (3) below lay before Parliament a report specifying

(a) the principal statutory duties on each class of relevant authority as specified in section 35(2) of the Local Government Finance Act 1988; and
(b) the likely impact on any such statutory duties of any authority which he expects to be required to set a substitute precept or amount in accordance with section 35(1) or 35(4) of the principal Act of the restriction of information on which such a determination may be based arising as a result of this Act.

(3) The Secretary of State shall, before making any Order to which the above subsections refer, certify that in his opinion no statutory duty of any authority which he expects to be required to set a substitute amount or precept in accordance with sections 35(1) or 35(4) of the principal Act is likely to be breached as a result of the operation of this Act.

(4) Where in making any determination under subsection (3) above the Secretary of State considers that any statutory duty of an authority concerned is likely to be breached by virtue of the setting of a substitute amount or precept irrespective of the operation of this Act, he shall make reference to this matter in any report laid before Parliament under subsection (2) above.'.—[Mr. Murphy.]

Brought up, and read the First time.

Mr. Paul Murphy: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this it will be convenient to discuss also amendment No. 2, in clause 6, page 5, line 28, after 'applies', insert
`subject to the making of an Order in accordance with section (Certification of Statutory Duties) above'.

Mr. Murphy: The purpose of the new clause and the amendment is to focus debate on the possible impact of the Bill on authorities that may be in danger of breaching their statutory duties. The amendments propose an order-making, certification and reporting process designed to give Parliament early warning of authorities that may be forced into a breach of their statutory duties and responsibilities. Before the Bill was applied in the first year Secretaries of State would be required under subsection (3) to certify that no authority affected would be forced to breach its statutory duties as a result of the operation of this unwelcome Bill.
The Bill essentially requires authorities to set substitute amounts in response to a formula and it prevents them from taking into account the latest view of information available to them at the time when the original amount was set. The difference likely to be made in the level of poll tax which may be set may be small but it could, in a critical case, push an authority into a choice between incurring losses and breaching the duties that this House has imposed on them.
More broadly, the effect of subsections (2) and (4) together is that a report must be laid when capping orders are produced, setting out the main statutory duties of authorities and showing where breaches of such duties may occur as a result of the Act or as a result of capping generally. In other words, when the Secretary of State is made aware that a council's statutory duties and obligations cannot be carried out by an authority, he must tell Parliament. As the Secretary of State must ask Parliament's permission for a whole range of actions to do with local government finance, it would be but a small matter for him, or them—since the Secretary of State for Wales would also be involved—to lay the details before the House of Commons.
When local authorities recently took the Secretary of State for the Environment to court, the effects of poll tax capping on their statutory responsibilities and duties were not seen as clearly as they are today. There was, as my hon. Friend the Member for Normanton (Mr. O'Brien) said in Committee, some reference to education budgets, but statutory duties were seen in a very general light. Given our experience since then, we now know that sudden changes in council's budgets imposed by Government can have the most disastrous effects on the mandatory and statutory services that they must carry out.
I should like to mention some of the statutory duties that the Government have imposed on local authorities by means of legislation. The Food Safety Act 1990 lays a general duty on food authorities to enforce legislation and to appoint public analysts. Last year, the Government


sponsored and the House approved the Environmental Protection Act 1990 which imposes a host of duties and responsibilities on our councils. Local authorities become the enforcement and licensing authorities for air pollution. They have a duty to keep public registers of all pollution licences and to create arm's-length waste disposal companies under the direction of the Secretary of State. They have a duty in respect of waste regulation authorities to licence waste management premises, and so on. Local authorities have many duties to do with waste collection, litter disposal, pollution of the air and of the soil—all of them laid on them by Parliament as a direct result of the legislation.
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Last year, Parliament passed the National Health Service and Community Care Act 1990, and even though the Government have postponed financing that Act, it will eventually mean that local authorities will have various duties in respect of community care.
My hon. Friend the Member for Barnsley, Central (Mr. Illsley) referred in the previous debate to the problem that his and other local authorities are having with education. Over the past few years, the Government have passed several education Acts. The curiously named Education Reform Act 1988 introduced the national curriculum and local management of schools. The Education Act 1986 had to do with special education. The Education Act 1981 concerned governing bodies, and the Education Act 1962 dealt with student awards. All these Acts, approved by Parliament, laid mandatory duties on local authorities which cost them considerable sums of money.
Most capped authorities will have made cuts in their education service at a time when the Government are implementing a variety of measures to improve, they say, standards in schools. During the legal action taken by capped authorities against the Secretary of State, various local authorities' officers served affidavits against the Secretary of State highlighting their worries about meeting their statutory duties. One officer said:
the council, if called upon to make education cuts, would simply be unable to carry out its statutory functions with respect to education.
Only yesterday, the Prime Minister saw fit to refer to homelessness and to how he believed that it should be tackled. All of us who have been involved in local authority housing matters are aware that the plight of the homeless is receiving increasing attention from local authorities and the Government; yet the statutory responsibilities that the Government place on local authorities can be met only if they are matched by the necessary money. Limits on expenditure caused by capping will inevitably result in fewer resources to deal with the problem. On top of capping, the Government have exacerbated the problem of homelessness by changing the subsidy arrangements for people housed in short-lease accommodation. That means that authorities must rely on expensive bed-and-breakfast accommodation. So district councils face increasing difficulty in coping with the problem of homelessness.
My hon. Friend the Member for Eccles (Miss Lestor), with her considerable experience in these matters, mentioned earlier the Children Act 1989. That Act and other social services legislation, such as the Disabled Persons (Services, Consultation and Representation) Act

1986, mean that a reduction in social services expenditure caused by capping will affect the most vulnerable sectors of our society.
Although the main provisions of the National Health Service and Community Care Act have been postponed, authorities are having to provide services for clients released from institutional care. In addition, limitations on finance make it more difficult for authorities to respond to the requirements of the Children Act. Recent media reports on child abuse have highlighted the importance of valuable resources being devoted to such services, the responsibility for which has been placed on the shoulders of local authorities by this House.
Local authorities have no choice about carrying out these functions. It has been a common complaint against all Governments, Labour or Conservative, that they under-resource our councils when they impose new duties on them. But this is worse: even when local authorities set a poll tax to cover their legal responsibilities, the scene can, because of this Bill, be changed dramatically, and they will simply run out of money or be forced to reduce vital services which are required by law.
It is crucial for Parliament to be give such a picture at the time of the setting of the poll tax so that we know that services that we have said must be carried out cannot be carried out because of a Minister's actions. The new clause and amendments would allow Parliament to debate such a critical situation. Even our consideration this evening of the possibility of such an occurrence highlights how dangerous and mischievous this seemingly technical Bill is. The Government would be well advised to accept these changes, if only as a prelude to dropping the whole Bill altogether, for its very existence makes a mockery of the Government's self-confessed claim to want local government accountability, and it certainly flies in the face of the even more ludicrous claim that the Government genuinely want to review or even abolish the poll tax.

Mr. A. J. Beith: The whole o the Bill makes nonsense of the Government's claim to be trying to introduce greater accountability at local level, and these amendments are brought to bear at a point where local government is being made answerable to Parliament, which is a negation of the entire concept of local government. I understand why they have been introduced in their present form: the Government are trying to widen the accountability so that it is not just a matter of the level of poll tax but also refers to the kind of services to be provided. I understand the argument that is being put.
It would, however, also be appropriate in making any such statement to refer to the extent to which the difficulties in providing services had been exacerbated by non-payment of the tax. First, it would be relevant for people to know at that point how much the authority's ability to provide services had been impaired by campaigns to persuade people not to pay the tax at all.
It is an increasing source of considerable resentment that there are still campaigns, supported in some cases by Labour Members, to encourage people who can afford to pay not to do so. It would therefore be interesting to see—although in practice one could not have this sort of detail—how much of the non-payment related to people who were liable for the full rate of tax, people who were entitled to no rebate and who might have considerably


higher incomes, and how much of it related to that section of the population which have been forced to pay 20 per cent. of the tax even though it had very little or no income.
We are talking about two rather different categories of people: those who could pay but refuse to do so and those who are in genuine and serious difficulty. It would be appropriate for us to know, in considering whether the statutory services could be paid for, if an authority had collected much less of the tax than other authorities. The non-payment element should be considered at this point.
Secondly, the tax is very difficult to collect in practice. It is particularly difficult to collect in urban areas where there is great mobility of population and from those people who just do not have the money to pay it. That is not a particular partisan observation—it was made by the Audit Commission in a recently published report on the tax. It led the commission to point to the futility of trying to collect the compulsory 20 per cent. from people who simply did not have the money to pay it.
It is an absurdity in the whole social security-benefit-taxing system that, because of the political requirement that everyone should pay a significant part of the tax, we seek to exact from people money that we know they cannot afford. We know it because we have a social security system which assesses that they cannot, yet we still insist on trying to get that 20 per cent. out of them. In some cases they will be the people who are the targets of the very statutory services threatened by the authority's inability to find enough money.
Those are two reasons why the statement should be much wider than proposed in the amendment and should refer to the non-payment element, both the deliberate and wilful element and that which arises from the absurdity of the tax. It is one of the many reasons why I believe that the tax should be scrapped and replaced by something that can reasonably be collected because it is both fair and effectively run. I refer to a local income tax.
This part of the Bill is being regarded with concern, not just by authorities which have already been capped but by those threatened with capping. Earlier today I met city councillors and officers from Newcastle upon Tyne who are watching their budget very anxiously because of the possibility of capping. The people whom I saw were from the social services committee, they were worried about providing one of the statutory services referred to in the amendment. There is a threat to the very important basic services that they provide.
One, in particular, is of concern to me because it affects my constituency. The authority is having to consider closing the County hotel in Rothbury, which for a long time has provided respite care for hundreds of elderly people and their carers in Newcastle upon Tyne. In large part it is self-financing, but there is a significant element of subsidy, essential because of the character of the care provided and the low incomes of the families to whom it is provided. The accommodation service, which provides employment in my constituency, has brought into the village of Rothbury for many years elderly people from the Tyneside conurbation who clearly benefit from this break in their normal routine, and there is an even greater benefit to the carers who would normally look after them. The service is a potential victim of capping, along with other important services in the city.
Newcastle spends more on its social services than do many other authorities, including my county of Northumberland, and questions must be asked about the costing and management of services in many of the authorities where the levels of charge are so high. It is difficult to ask those questions—and it is particularly difficult for the general public to ask them—when the system of Government grant to local authorities is as confused and confusing as it now is. It is another illustration that no one really knows who is responsible.
The Government have managed to bring about a situation in which the general public are confused about whether their authority is a high spender or whether it is the Government's fault because the grant system is all wrong. On the whole, they are inclined to blame the Government, so the Government must get themselves out of the situation by carrying out the sort of fundamental reform about which the Secretary of State is beginning to talk about. I am glad to hear that he is beginning to talk about it, but it still seems a long way away and, unless he pulls a rabbit from a hat, people will carry on blaming the Government and being confused and puzzled by it all.
My area, Castle Morpeth, has a poll tax which is £100 higher than that of neighbouring authorities. People ask why our authority is not going to be capped. There are two reasons. One is that the borough council spends too little to qualify for capping. The other is that 80 per cent. of the money goes to Northumberland county council. The reason for the £100 difference, however, lies deep in the interstices of the Government grant system and the safety net system. It all relates to the complicated arrangements by which the Government assessed average rateable values; it has absolutely nothing to do with the relative spending levels of the Castle Morpeth authority compared with other authorities. Its spending levels are broadly similar to those of its neighbours.
The public, however, has no way of understanding these complexities; they are difficult enough for professionals to make sense of, and they further show that the whole debate about capping takes place in an atmosphere and against a background where no one knows or can say with authority who is to blame—certainly no one whom the public is likely to believe. People listen to assertions and counter-assertions from those who have an axe to grind.
It is depressing that all Conservative Members seem fervently to believe that all Conservative authorities are terribly responsible and that only Labour authorities overspend. A contrary view appears to obtain on the Opposition side. The general public are not much inclined to believe that sort of thing, and it further underlines the case for fundamental reform. Even if the statement envisaged in the new clause is produced and the House had the benefit of the Government's statement along with the capping statement of how statutory services would be affected, I do not think that people would believe that either. The sooner we get rid of this nonsense the better.

Mr. Key: The hon. Member for Torfaen (Mr. Murphy) spoke about the statutory duties that the House places on local authorities and listed a long catalogue of woes. Under our intended criteria, no authority would be capped if its budget were at or below its standard spending assessment. Those assessments take account of the new


burdens and duties on authorities, and also take account of scope for greater efficiency and the amount that the country can afford.
The hon. Member for Torfaen spoke about affidavits submitted by certain local authority officers. It is important to get the matter straight. In their judgment their Lordships said:
Capping does not in any way impinge on the rights of members of the authority either as citizens or as councillors, nor does it impugn their collective conduct as either unlawful or discreditable. A difference of opinion between the Secretary of State and the designated authority as to what is the appropriate level at which their community charge and their expenditure should be set is purely a political difference.
It is important to place that on record.
The hon. Member for Berwick-upon-Tweed (Mr. Beith) is not puzzled or confused, as became clear when he came to talk to my right hon. Friend the Secretary of State, my hon. Friend the Minister for Local Government and Inner Cities and me. We were grateful to him for coming and for his constructive approach. We welcome his participation. Plainly, we must have a fundamental review of local government. Perhaps it should have been done many years ago. That is why my right hon. Friend the Secretary of State is taking these matters forward and I am glad that it is being done with the participation of the hon. Member for Berwick-upon-Tweed.
The new clause and the related amendment seek to delay the operation of the Bill's provisions for any particular year and to place a series of requirements on the Secretary of State. They say that he must make an order and before doing so he must lay a report before Parliament. Before doing that, he must make or issue a certificate in some unspecified way.
That bizarre and convoluted procedure suggested by the Opposition appears to have as its rationale—such a description is charitable to say the least—the idea that in some way the Bill affects the fulfilment by a capped authority of its statutory duties. Plainly, the Bill affects the duty of a charging authority to reset its charges after capping. That is the whole point. It is to guarantee that charge payers are not denied the full benefits of capping. The behaviour of Lambeth council this year shows that such protection is needed.
Leaving aside that self-evident point and the complete confusion over the proposed changes between precepting and charging authorities, I have to tell the House that the suggestion that the Bill otherwise affects the capped authorities' fulfilment of their statutory duties is completely unfounded and misconceived. It has no bearing on the matter. The provision of services by capped authorities is not affected by the Bill, which is about the translation of budget cuts, following capping, into commensurate reductions in charges. The Bill is not about capping in general or about the size or implications of budget cuts resulting from the capping of excessive and overblown budgets. Legislation on that is contained in part VII of the Local Government Finance Act 1988.

Mr. Murphy: Does the Minister accept that, essentially, it is the capping of a budget that is derived from the 1988 Act and that ultimately the budget is related to services? Surely if the revenue that can be raised by the community charge or poll tax is limited by an Act of Parliament, that is bound to have an effect upon the statutory duties placed on local authorities.

Mr. Key: My argument all along and in Committee is that that is not the case. The amount of money in the collection fund is but one factor that an authority will have to consider when setting its budget for the following year. That shows one of the fundamental errors in many of the Opposition's amendments. In terms of the effect of budget reductions required by capping, any cap set would represent the Secretary of State's view of what is reasonable, achievable and appropriate in all the circumstances of each capped authority. There are procedures by which authorities can make representations about proposed caps, and they are fully taken into account by the Secretary of State when he makes his decisions about final capping levels. The first year of capping in which the proposed caps of three authorities were increased shows that those procedures are no mere charade.
No authority can be free of the need for expenditure restraint and for seeking greater value for money which, as I said earlier, in the end means greater value for people. For next year we have made known for the information of authorities our firm intentions for capping criteria. A t their express request we did that much earlier than in the past. I do not accept any suggestion that capping necessarily leads to disruption of essential services. There is considerable scope for authorities to look carefully at the administration and management of their services to ensure that waste is eliminated and efficiency improved. I suspect that many Opposition Members would be the first to appreciate and recognise that and that many of their authorities would try to achieve it. The new clause is not merely misconceived but completely irrelevant to the Bill's purpose. I urge the House to reject it.

Mr. Murphy: The purpose of the new clause is that it is only when a local authority's statutory duties and responsibilities are affected adversely by the operation of the Act that a report has to be made to the House. If, as the Minister suggests, the local authority is not affected by the poll tax cap, no report would be made to the House. Therefore, the Government have nothing to lose by accepting the new clause.
Question put and negatived.
Order for Third Reading read.

The Minister for Local Government and Inner Cities (Mr. Michael Portillo): I beg to move, That the Bill be now read the Third time.
I apologise to the House for my absence during part of our earlier proceedings, but I gather that in my absence hon. Members continued to debate the Bill with all the good humour that characterised our proceedings in Committee. I pay tribute to the Opposition and to my colleagues for the very good spirit in which our debates were conducted.
I suspect that the House would like me to be brief because this is a short Bill. It has been exhaustively debated and at this stage it would be challenging to make a long speech about it. I remind the House that the Bill's intentions are limited. As the Under-Secretary of State for the Environment, my hon. Friend the Member for Salisbury (Mr. Key), said, the Bill is not about capping in general. However, on several occasions it has given us the opportunity to confirm that the Government stand ready to use their capping powers in the coming year in line with


criteria announced by my right hon. Friend the Chancellor of the Duchy of Lancaster on 31 October when he was Secretary of State for the Environment and which my right hon. Friend the Secretary of State for the Environment confirmed in his statement to the House on 17 January.
The Bill seeks to close a loophole which could have had serious consequences, and which in any case represented an injustice because it would have allowed local authorities to avoid passing on to community charge payers the benefit that was intended for them by the act of capping. I was considerably surprised to find that the Labour party did not wish to support us at least on the narrow point that, once an authority had been capped and had gone to the length of setting its new budget and making the necessary reductions in spending, the benefit should be made available to community charge payers.

Mr. Illsley: Again the hon. Gentleman has referred to the idea of the benefit of charge capping being passed on. There are certainly no benefits in my authority from charge capping. It has affected jobs, the music centre, has brought about redundancies and so on.

Mr. Portillo: I cannot agree with the hon. Gentleman. If he looks at the reduced community charge bills which people have to pay, he will find I think that the largest reduction in any one authority was £99—and I speak from memory—in the borough of Hammersmith and Fulham. If the hon. Gentleman speaks to my hon. Friend who represents that borough, he will find that my hon. Friend will speak eloquently about the difference that £99 makes to a community charge payer in Fulham. It makes a very big difference indeed. The hon. Gentleman should not simply be concerned with levels of spending which in themselves tell us nothing about levels of service. He must also be concerned about levels of cost and what people can afford. Local authorities should take that into account, but the Government stand ready to help them to take it into account by means of capping but must, after the operation of this Bill, put it into effect by benefiting charge payers.

Mr. Illsley: Is the Minister aware that when capping was announced there was considerable public debate? There was even more public debate when it was found that, as a consequence of charge capping, children in my authority cannot now go swimming from school. Schools have stopped all swimming. Furthermore, children cannot learn music at a centre of excellence which had to be closed and teachers made redundant.
Those are the so-called benefits from charge capping. The charge payers in my area had their bills reduced by £59. If the level of public debate, in the local press and in the media in general, including a petition delivered to 10 Downing street containing tens of thousands of signatures, was anything to go by, people would have accepted the original legislation. They would have liked to have the opportunity to retain the benefits of swimming facilities under the education system, the music centre and all the rest of it. Once again, I point out that in Barnsley there are no benefits from charge capping.

Mr. Portillo: In a way, the hon. Gentleman makes my point for me, although he does not mean to do so. I do not accept that the consequences that he describes necessarily flow from charge capping. Let us for a moment suppose

that they did. All the changes in spending having been made, and also the reductions in service, would the hon. Gentleman then wish to see the reduced charges denied to the community charge payer? I know the hon. Gentleman to be a rational and reasonable person and I should have thought that he would say that, at the very least, if all that pain has been suffered, there should be some offsetting benefit, which is that people pay £59 less in community charge.
In the borough of Lambeth, the process having been gone through and reductions having been made, the borough sought to deny in full the benefit in reduced community charging. That is the limited point in this Bill. We thought that what happened in Lambeth was unacceptable.
We also thought that there was another important point of principle: that all boroughs, whether capped or not, should be put on all fours with each other. No other council, once it has set its charge for the year, can go back in mid year and alter its estimate of the number of people who will be paying community charge. No other council will have the luxury of going back in mid year and changing its idea about what the community charge should be. We do not believe that, just because an authority has been capped, it should be put in a different position. We thought that what happened in the Lambeth case was quite wrong and thought it essential to put the position right. We are determined that there should be no repetition of that.
We have been surprised that the Labour party, on this narrow point, has still sought to affirm the right of local authorities, having made the necessary reductions, still to deny to their community charge payers the benefit of those reductions. We are determined that that should not be repeated. That is why I commend this short Bill to the House, and urge that it should go to another place.

Mr. Blunkett: I am sorry that the Under-Secretary of State, the hon. Member for Salisbury (Mr. Key), is departing as I was about to ask him to have a word with the hon. Member for Teignbridge (Mr. Nicholls) about his earlier remarks—not least the inappropriateness of his words about dyslexia, never mind his astonishing remarks, in view of the circumstances, about breweries. Perhaps hon. Members on the Treasury Bench will pass those thoughts on to the Secretary of State.
We have already stated in Committee and this evening that this Bill was ill-timed and is an irrelevence. We believed that it was ill-conceived when it was first brought forward, but circumstances have overtaken it. It is now superfluous as well as an inconvenience and an irrelevance. Therefore, we shall be voting against it.
The Minister for Local Government and Inner Cities suggests that it is a surprise to him that the Labour party is against this Bill as it is merely a tidying-up exercise, consequent on ill drafting—he did not say that, but it clearly is such an exercise. It is a consequence of the ill drafting that flowed from the 1988 Act. That is astonishing, given that we trawled through the legislation for three months often late into the night and the early hours of the morning. I remember it well. It resulted in my ending up in hospital with pneumonia, which was a great relief after sitting through that Bill. Nevertheless, here we are with a sort of afterthought—a little pimple on the


original Bill. But the pimple is a bit more than that. It is more like a boil. That is why we have chosen to lance it if we can. We think that that would be in the best interests of the overall health of the patient. In this case the patient is what remains of local democracy.
The poll tax capping legislation and the way in which it has been imposed allow the Government to set the figure for spending. Of course, the Government assumed that there was a simple equation between the setting of the figure for spending and the subsequent poll tax. This Bill reflects the belief that there is a simple equation to be imposed which, inevitably, will result in a particular poundage. We do not accept that. We believe that the information on which the Government need to work should take fully into account the local circumstances about which the officials and councillors at local level are in the best position to make a judgment. The Government are not in such a position. Those changed circumstances arise directly from the consequences of capping.
When an authority is capped, there is an inevitable delay in the imposition of the poll tax at local level. There is a change in the likely collection level, as there is in terms of the equated and relevant population levels. Therefore, there is a danger that the collection of the poll tax will result in a shortfall to the collection fund. If that happens, there will be consequences which, apart from protecting the poll tax payer, will have an adverse result.
The Minister in charge of the Bill and Committee members constantly referred to hapless poll tax payers. We thought it an appropriate phrase. In fact, the hapless poll tax payer would not get the benefits that he believes this Bill will bring to him. Poll tax capping has a detrimental effect on services and the provision of services is what local authorities are all about, rather than low taxation. They are about value for money and the relationship between the tax raised and the level of services provided.
The whole intention of a local authority is not to levy no tax and provide no services. I know that new recruits today on the Conservative Benches believe that. The new recruits are people like the hon. Member for Torridge and Devon, West (Miss Nicholson) who has just joined the Minister of State in the No Turning Back group. She said this afternoon that she believed in compulsory tendering rather than compulsory competitive tendering, which was in the document recently published by the No Turning Back group. It must come as a revelation to the Minister to have recruits to the group, just at the moment when we all believed that it was about to be disbanded. That is life after death indeed. It suggests that there may be movements and murmurings, which we suspected existed, to show that the lady who departed No. 10 just a few weeks before Christmas lies in the shadows after all, waiting, watching and encouraging. That is a sign that things are on the move.
Of course, what is not on the move is the poll tax—[Interruption.] I must correct myself. The poll tax is on the move—it is in reverse gear and going backwards, and tonight poll tax capping and the Community Charges (Substitute Setting) Bill are going with it. Why did the Government continue with the Bill? Even if it was relevant before last week, it is certainly not relevant now.
As I said earlier, if the Government introduce so-called relief in the form of a new community charge relief scheme, and if that brings into equilibrium the present year's bills—with the promise of a £104 maximum payment compared with the old rates—the logic is that capping will

be abandoned to allow people to make a clear judgment between different local authorities, and between different parties within local authorities, as from this year to next. That is the logic, so capping becomes an irrelevance unless any vestige of accountability has been abandoned and the Government do not want a clearer indication between different parties and different local authorities upon which the electorate can make a judgment. Capping would interfere with that judgment.
Not only does the Secretary of State now have the ability to fix the relationship between the current bills and the previous rate bills, which we shall be debating next week, but under capping he has the ability to determine next year's bills, and therefore their relationship with this year's bills. That takes away any vestige of decision-making by a local authority and any judgment by the local electorate about the responsibility of those elected local councillors for their decisions. It is a mess.
It is important to spell out exactly what the Government's responsibilities are, so that if people are worried about the cuts in services and the dangers to their education, social services, leisure and protection services, they will understand that it is the Government who are at fault. The Government have the power to determine the exact level of poll tax being levied—and, under the Bill, can determine the exact poundage—so the electorate should be aware that it is the Government who are at fault. If people do not like the unholy mess of the Government setting the poll tax and determining the cuts, the Government are at fault again. Whether it is cuts in services, poll tax levels, administrative chaos, or an unholy mess at local level, only one set of people is to blame—Conservative Ministers. They have brought it upon themselves because they have bound, gagged and generally put aside any vestiges of local democracy.
There is universal capping, universal suffering and universal centralisation. Ministers are responsible for the whole mess. That is the logic and the outturn of the Bill. However, we have revealed some grave misunderstandings among Conservative Members. The hon. Member for Torridge and Devon, West did not even understand the difference between equalisation and standard spending assessments. She revealed that she is now wholly committed to the SSAs, which only a few weeks ago she declared herself to be against.
The formula has not changed and the implementation has not changed—only minds have changed. Of course, everybody is open to persuasion, arm twisting and pressure, but the SSAs have not altered and nor has the amount put into revenue support. All that has altered is a commitment from Conservative Back Benchers, on a wing and a prayer, in the hope that the new Secretary of State will bring them some promise and relief to get them through the general election. The Bill shows that there is no hope of that.
Whatever happens, there will be capping. Whatever happens, there will be greater centralisation. With that greater centralisation will come more determination of the services provided at local level. In other words, we will continue to get what we have now, but with a slight change of formula. Perhaps there will be a property tax together with the poll tax. Perhaps there will be centralised delivery of major services together with the poll tax. Perhaps there will be a property tax, greater centralisation and the poll tax. We could end up with all three. Whatever happens,


there will be the same mess as we are in tonight because the same ideology and values will be imposed upon the same people.
The electorate will not be fooled by what is happening today or by what we debate next Tuesday. That is why we are asking that the Bill be set aside. It has wasted a great deal of time. We have endeavoured to get the Minister to go back to the Department to fight his corner for poll tax as best he can. We have tried to concentrate on the key issues rather than becoming bogged down in the algebraic formulae. We hope that from today's debate and from our debates in Committee people will have learnt a little more about local government and about the importance of allowing decisions to be taken at local level.
Hon. Members might not be aware that in advocating that the Secretary of State should have the right, under the Bill, to determine the exact contribution from the poll tax payer to the collection fund, they have missed a provision that already exists in the Local Government Finance Act 1988. Section 99(4) of that Act already gives the Secretary of State the power to do what one Conservative Member proclaimed should have been necessary in authorities which managed, through creativity or by drawing on reserves, to avoid capping. That section allows the Secretary of State to demand adjustments in the amount placed in the collection fund if he believes that that fund exceeds the figure necessary to provide the agreed services voted through a council. Of course, that would apply whether or not that council was capped because it would be the same formula.
However, that has not been included in the Bill. The only reason for that, and the only reason for the Bill, is simply that the Government lost their court case against Lambeth. It is a piece of spite. The Government simply could not be defeated by Lambeth, of all boroughs. They could not face the fact that the High Court had proclaimed that, on this occasion, Lambeth had it right. After all that had happened over the years with court cases and with obiter dicta, when judges said that they sympathised with local government and understood why it had taken certain actions, but that nevertheless the Secretary of State had the drafting right in legislation and all power rested in Marsham street, suddenly all power did not rest there. The last tiny vestige of power to determine the poll tax level and to ensure that the collection fund was adequate to meet a given level of services was taken out of the hands of the Secretary of State. Lambeth won. As a consequence, we have wasted our time on this Bill. That is what it is all about.
The Government had the power under section 99(4) and through recent decisions to fix next year's bills through universal capping, and to compare next year's bills through the new charge relief scheme. All those things exist and all the powers are there; but Lambeth had won. We believe that capping is unnecessary; we believe that poll tax is unworkable and we think that the Government should come clean and admit defeat. They should withdraw the Bill, withdraw the poll tax and adopt our alternative. Let us go back to a common-sense scheme which will give cheaper bills, more equality and equity and greater fairness. Let us have a modern property tax, adjusted according to the ability to pay, to provide decent services for the people who vote for local authorities.

7 pm

Mr. Beith: Why have we been asked to give a Third Reading to this Bill? The Bill is before us because the courts found that there was a small gap in the Government's ability to dictate what should be the level of poll tax paid in certain local authorities. The gap was that the local authority could still charge a higher poll tax than its reduced expenditure, as a result of capping, would allow. Why is it necessary for us to give a Third Reading to the Bill in order to fill that gap? The Government have pointed out how ludicrous it would be for a local authority, having been forced to cut its services drastically by capping, not then to reduce the poll tax paid by its poll tax payers. They would be suffering a double pain and the Minister has pointed out that this would be an extraordinary consequence—so extraordinary that it would seem sufficient to remind the people of that state of affairs and invite them to the react accordingly when next given the opportunity to elect their local authority. It might well lead them to throw out the people who were in charge and replace them with others. Indeed, the whole capping mechanism seems to beg the question why the behaviour of local authorities, which the Government criticise so strongly, is not so repugnant that they get thrown out by the electorate which put them there in the first place.
There are a number of reasons why the Government have felt obliged to press ahead with this Bill rather than relying on the good sense of the local electorate. One reason is that the local electorate does not have the means to exercise its good sense because the electoral system distorts the choice that it can make. The Government know that. They are reluctant to change it because of the wider implications. It might increase the pressure for electoral reform at national level. The Government must know that; otherwise they would be ready to abandon this Bill and rely on the local electorate to throw out a local authority that visits upon the people an excessively high poll tax, even when the services have been cut because of capping. The Government are well aware that there are fiefdoms of one-party rule which arise from not having a fair electoral system. There are local authorities in which opposition voices cannot be adequately heard.
There is a second reason why the Government have felt obliged to press ahead to the Third Reading. They brought before us and enacted a tax which, in their view, should have made this Bill unnecessary. They brought forward a tax which was supposed to be so simple and so clear that everybody would understand that if they were being asked to pay too much they would react accordingly at the polls. But the people do not understand and the system is extremely complicated because it is such a bad tax. It is a flat-rate tax which does not take proper account of the ability to pay. Therefore, it has had to be cushioned and modified in more and more ways. Last week we had details of the next way in which it has to be cushioned. That cushioning is necessary because it is such a bad tax. In our view, it needs to be abolished and replaced with a local income tax. Until we have a tax that is related to ability to pay and can be collected by a competent system—we suggest the use of the existing PAYE system—all the cushioning will continue to be necessary. Therefore, local electors will not know precisely who is responsible for their high charges and, again, that will be a justification for capping. The Government will feel that they must cap the


charges of the local authorities and the local electorate cannot know whose fault it is that their charges are so high.
Some of the charges that are the subject of capping are grotesquely high. The Lambeth poll tax level is ludicrously high. It should be self-evident that there is something wrong. The Government have only themselves to blame that they have produced a system that is so confusing that even under a reformed electoral system it is conceivable that the electorate of Lambeth would visit upon itself such an appallingly high tax.
The Government are pressing ahead with the Third Reading of the Bill because they do not have a proper electorate system for local authorities and they do not have a proper tax base for local government. The very fact that they are prepared to proceed to Third Reading shows clearly that they are not so handicapped as they pretend in their ability to do something about the situation. They are proceeding here with primary legislation, but in the discussions that have been referred to which I and my hon. Friends have had with Ministers the Government have been very shy about having primary legislation. They did not want to face the problems involved in bringing legislation before the House which might abolish the poll tax and replace it or modify it radically. That legislation might have been more welcome to this side of the House than the Bill we are now discussing.
Why are the Government so shy about primary legislation when they are prepared to undertake it in this respect? It is intriguing that they did not follow the line of primary legislation on capping which the Secretary of State had previously advocated. He put forward proposals which would have required a modification of this Bill. Under the proposals that he advanced capping would have continued, but there would then have been an election. A new election would have taken place—

Mr. Deputy Speaker: Order. The hon. Gentleman is making a speech which is much wider than a conventional Third Reading speech. He has referred to electoral reform, local income tax and the general faults of the community charge. I wish that he would address himself specifically to the contents of the Bill.

Mr. Beith: Indeed, Mr. Deputy Speaker, I am drawing to a conclusion and pointing out why hon. Members should not vote for the Third Reading. I refer to the absence from it of the provision previously advocated by the Secretary of State under which, when all these procedures had been gone through and when the Government's intention of capping had been announced, it would then have been possible for an election to take place in which the local electors could have said, "Never mind, we will put up with this level of charge." That has not been put into the Bill. The Government have taken the opportunity of primary legislation and wasted it on fiddling around with the capping system which would not be necessary if the tax and the election system were both fair. There I rest my case. The Bill should not be given a Third Reading.

Miss Kate Hoey: I shall be brief because many of the points raised tonight have been discussed in Committee. As one of the Members who represent

Lambeth, the borough which has featured most in this Bill in terms of the number of references made to it by other speakers, I wish to make one or two relevant points.
The Minister talked about closing loopholes. We are all very clear about this, and my hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) put it better than If could possibly do. He pointed out that the Bill is a vindictive measure which has been introduced to try to prevent Lambeth from doing what it has proved it was legally right to do. The House needs to be reminded that what we are talking about is not Lambeth behaving irresponsibly or in a way that was outside the law. We have to remind the Minister of this repeatedly because he does not seem to take account of it. I remind him of what the judge said in court. Mr. Justice Otton said that Lambeth council had behaved reasonably and that the councillors had approached their task with care. That is important, because I am getting rather fed up with hearing people continually lambasting Lambeth council.
We all know that there is room for improvement in any local authority. I and my hon. Friend the Member for Norwood (Mr. Fraser) continually make that point to the leaders of the council and to others. But for Ministers continually to attack Lambeth when Mr. Justice Otton has found that it had not acted illegally does not help to establish a good working relationship between them.
The people of Lambeth are not stupid; they are intelligent. The Labour majority in Lambeth and the percentage of people who voted Labour at the council elections increased, despite the fact that it was known that the poll tax was likely to be £548. The electorate knew that: it wanted a Labour council because they were able to look across the border and see the effect of Tory councils in boroughs such as Wandsworth. People in Lambeth would obviously like a lower poll tax, but more important is what services are being delivered and how that is done.
My hon. Friend the Member for Norwood and I realise, that there have to be improvements, and those are being worked out. The district auditor has said clearly that Lambeth council faces considerable problems but that he, is encouraged by recent initiatives to address the underlying weaknesses. That work is a major undertaking for the council, and I hope that the initial progress can be maintained. Lambeth council needs some support from the Government: it does not want to be attacked at every possible level and at every opportunity.
We are about to give a Third Reading to a Bill which prevents reasonable circumstances from being taken into consideration when a council is capped. We have not been able today to debate amendment No. 1 which would have taken into account the fact that no business or Government Department would expect to have to take new decisions on the basis of old and outdated information, and local authorities should be no different. They should be able to look at the changed circumstances, many of which have been outlined by other hon. Members.
For example, local authorities should be able to take into account such things as changes in population, how many people are paying their poll tax and, as the hon. Member for Southwark and Bermondsey (Mr. Hughes) said, the way in which inner-city areas experience influxes of population. Even the most efficient authority, in an area where there is a willingness to pay the poll tax—which is often not the case because many simply find it difficult to do so—should still have such discretion. We have not been able to discuss today the amendment which sought to


achieve that. A borough with high unemployment such as Lambeth cannot be treated in the same way as local authorities elsewhere which have not been capped.
The Opposition are opposed to the poll tax, the essential characteristic of which was meant to be accountability. Lambeth people voted for a Labour council on the basis of a high poll tax. The high poll tax remains, but services have had to be cut drastically and Lambeth people now face the possibility of an even higher poll tax next year because of the Government's policy and the changes which have in no way helped our borough.
The Government may think that the more vindictive they are towards the people of Lambeth, the more that they attack Lambeth council, the more that they try to publicise some of the rather silly things that any local authority might do, using that as a political weapon, the more the ordinary average decent person of Lambeth will be convinced that the only way to effect the changes that they want in their borough with a tax that they can afford will be to kick out the Government by solidly voting Labour at the next election.

Mr. Illsley: I want to make only a few brief comments, because most of the arguments have already been gone through. This is a narrow Bill. The reasons for closing the Lambeth loophole are debatable and could have been motivated by political spite. It is clear that the Bill and the recently published regulations setting out the criteria for charge capping simply remove any last vestige of accountability for the poll tax. Charge capping destroyed the accountability so revered by the Government and the basis on which they put forward the poll tax as their flagship.
This year, as we have seen, not only has charge capping been retained, but so has the percentage limit on each authority's budget. As we have progressed, further restrictions have been imposed on local authorities, preventing the electorate from voting for the level of poll tax that they would like. The electorate does not have the luxury of going to the polls to vote against a poll tax which they believe is too high, because the Government have already taken the action for them, reducing it through charge capping and ensuring that charge capping passes on the full benefit, as the Minister calls it, although I would disagree.
The Bill is unnecessary. The poll tax as it stands cannot survive much longer. I was amused when the Secretary of State said last year that there would be a two-year review, which obviously puts it after the next general election. I am sure that many Conservative Members were as dismayed as I was when they heard that.
The revenue support grant levels that have been recently announced also show that the Secretary of State is rather more committed to the poll tax than he would have had us believe last year during the election campaign for the Conservative party leadership. I recall statements made at that time by all three of the main protagonists that the poll tax would be amended.
The Bill is absurd. Its main purpose is to attack a Labour-controlled authority. When an authority is being capped, it makes no sense not to take account of the information relevant at that time. The Minister said earlier

that authorities should not be allowed to change their poll tax in mid-year. He said that authorities are all in the same boat. But with this Bill, they are clearly not all in the same boat because if the Bill is applied an authority has been singled out for charge capping, so it is not in the same position as the other local authorities. Therefore, it could be argued that, when such capping is applied, authorities should be able to take into account the shortfall in their collection to avoid passing that on to charge payers in the following year.
Standard spending assessments are the root of all evil when it comes to the poll tax. They are the basis of the charge and of charge capping and, when they are unfairly set, there are bound to be instances when charge capping is implemented. When an authority's standard spending assessments are held at a low level it will be forced to make cuts.
It is not simply a matter of SSA differences between areas; it is a matter of gross unfairness or, even worse, gross incompetence in setting the SSA. We have heard repeatedly today about the incompetence of local government, but perhaps it is the incompetence of the Government in setting the SSA so low that has caused all the problems relating to charge capping.
There can be no justification for the SSA differences that we highlighted in Committee. There is no justification for capping authorities when the standard spending assessment is determined on the basis of cost cutting. Obviously there is no justification for the Bill, and we shall vote against it.

Mr. O'Brien: This is the fifty-second or fifty-third Bill to have been targeted by the Conservatives at local government over the past 11 years. It has been unnecessary from the very beginning. The explanatory and financial memorandum says:
Section 35 of the Local Government Finance Act 1988 imposes on charging authorities duties to set substitute amounts for their personal community charges in certain circumstances.
The circumstances referred to will arise when the Secretary of State decides that certain authorities should be capped because of the level of the charges levied to provide the services demanded by the electorate.
However, Lambeth took on and beat the Government and, as a result, we have this Bill, which I consider to be misleading in many respects and unnecessary in others. I quote again from the explanatory and financial memorandum:
The Bill has no implications for central government finance. And it has no significant cost implications for local authorities.
That, in my opinion, is totally misleading. There is solid evidence that the Bill has, and will continue to have, financial implications for local authorities. Indeed, some of those implications will be significant.
The Audit Commission has warned the Government that in many districts more than 10 per cent. of this year's community charge proceeds may prove to be irrecoverable. According to the commission, that may result in community charge payers having to pay an additional amount of as much as £42 in 1991. The commission is issuing to local authorities guidelines for the purpose of assessing the likely extent of non-payment. That is not a Labour-controlled body—it is a Government body—yet it is warning that people will be unable to pay the poll tax


and that chasing those people will be very expensive. Thus, the Bill does have financial implications. The commission says:
The Government, in its £381·41 target charge, has made no allowance for the non-collection facility.
I can tell the Minister that numerous local authorities are finding it difficult to collect the community charge from all the registered payers in their areas. It is recorded that more than 100,000 people who are registered in Leeds will not be residing at their permanent addresses. The Leeds city council will receive no community charge payment from those people, and it will be impossible to trace many of them as they will have left the area. Yet the Secretary of State says that the community charge level takes no account of that circumstance. It is a situation that will afflict all local authorities, particularly those in cities, which will find it most difficult to keep registers up to date. The cost of maintaining registers will have to be taken into consideration, but the Secretary of State ignores the fact that that will result in an additional burden on poll tax payers.
The Bill is targeted at local government. There is no justification for it and the Opposition will divide the House on Third Reading. We have requested that no order to cap an authority be made until the Secretary of State reports to the House the likely impact on the services that the local authority has a responsibility to deliver.
It has been pointed out that over the past 11 years the Government have repeatedly introduced legislation imposing additional responsibilities on local authorities. I refer, for instance to laws affecting children, the environment, fire services and civil defence. Housing benefit is another matter which local authorities have been required to attend to. Then there are such matters as environmental health. I put it to the House that without proper funding there will have to be cuts in services. As a result of the levels set by the Secretary of State, many of the authorities that are required to discharge these statutory responsibilities face tremendous problems in securing a collection fund capable of ensuring the provision of services. The Bill is grossly unfair and undemocratic. There is substantial evidence that it will adversely affect the ability of local authorities to discharge their statutory responsibilities. The local authority in Leeds has more statutory responsibilities than many others—responsibilities, indeed, equal to those of authorities to which the Secretary of State has given an additional allocation under the RSG formula.
Leeds has a large ethnic population, for which it has a statutory responsibility to cater. Leeds must also provide facilities for visitors. It is a regional centre, it excels in the provision of professional services and many people visit the city. That leads to greater pressure on the local authority's highway network, and traffic management facilities must also be improved. There is also a greater demand for more leisure facilities. Although a charge is made for all that, there has to be a public subsidy. The costs facing the local authority in Leeds are such that if the Secretary of State insists on expenditure being curtailed, the authority will face capping.
Because Leeds is a regional centre, the rents of commercial properties are higher than they are in many other areas and that affects the city's budget. Tourism in the area is also a growing industry. However,—

Mr. Deputy Speaker (Mr. Harold Walker): Order. We cannot, on Third Reading, have a review of the services provided by any of the authorities that have been charge capped.

Mr. O'Brien: I appreciate that, Mr. Deputy Speaker. I was just making the point that the Local Government Finance Act 1988 includes the provisions that Ministers are now seeking in this Bill. There is no justification for this Bill.
If the 1988 Act contains the necessary provisions, why are we debating this Bill tonight? The 1988 Act includes the necessary provisions because they were intended to cover the kind of things that we have discussed today. We tabled amendments today to allow local authorities to take account of any changes in circumstances or of new information becoming available to them between the setting of their original poll taxes and the setting of the capping level. At no time in Committee or in the House tonight have the Government justified the need for the Bill. It is not necessary and it does nothing to enhance the services or the financing of local government. It is not justified and we will oppose its Third Reading.

Mr. Portillo: With the leave of the House, I will reply. I sense that the House wants to vote, and the arguments have been debated fully already. I want simply to address one point that was made by several hon. Members, and in particular by the hon. Member for Vauxhall (Miss Hoey), and that is the idea that there is anything vindictive about the Bill.
The Bill is not vindictive. We do not claim that Lambeth acted illegally and the matter was tested in the courts. However, following the Lambeth case, there was a loophole which we had to fill. The hon. Member for Vauxhall wrestled with a good deal of embarrassment. She knows that her council does several daft things which she had to admit she is forced to attack from time to time. However, she is bound to that council because it is run by her party.
Vindictiveness may have occurred in Lambeth's decision to try to deny to its community charge payers the benefit of having reduced its budget. The Bill corrects that vindictiveness, and for that reason I commend it to the House.

Question put, That the Bill be now read the Third time:

The House divided: Ayes 302, Noes 225.

Division No. 45]
[7.33 pm


AYES


Aitken, Jonathan
Body, Sir Richard


Alexander, Richard
Bonsor, Sir Nicholas


Alison, Rt Hon Michael
Boscawen, Hon Robert


Allason, Rupert
Bottomley, Peter


Amess, David
Bottomley, Mrs Virginia


Arbuthnot, James
Bowden, A (Brighton K'pto'n)


Arnold, Jacques (Gravesham)
Bowden, Gerald (Dulwich)


Aspinwall, Jack
Boyson, Rt Hon Dr Sir Rhodes


Baker, Nicholas (Dorset N)
Braine, Rt Hon Sir Bernard


Baldry, Tony
Brandon-Bravo, Martin


Banks, Robert (Harrogate)
Brazier, Julian


Batiste, Spencer
Bright, Graham


Bellingham, Henry
Brown, Michael (Brigg &amp; Cl't's)


Bendall, Vivian
Bruce, Ian (Dorset South)


Bennett, Nicholas (Pembroke)
Buchanan-Smith, Rt Hon Alick


Bevan, David Gilroy
Buck, Sir Antony


Blaker, Rt Hon Sir Peter
Budgen, Nicholas






Burns, Simon
Haselhurst, Alan


Burt, Alistair
Hawkins, Christopher


Butler, Chris
Hayes, Jerry


Butterfill, John
Hayhoe, Rt Hon Sir Barney


Carlisle, John, (Luton N)
Hayward, Robert


Carlisle, Kenneth (Lincoln)
Heseltine, Rt Hon Michael


Carrington, Matthew
Hicks, Mrs Maureen (Wolv' NE)


Carttiss, Michael
Hicks, Robert (Cornwall SE)


Cash, William
Higgins, Rt Hon Terence L.


Channon, Rt Hon Paul
Hill, James


Chapman, Sydney
Hind, Kenneth


Chope, Christopher
Hogg, Hon Douglas (Gr'th'm)


Churchill, Mr
Holt, Richard


Clark, Rt Hon Alan (Plymouth)
Howard, Rt Hon Michael


Clark, Dr Michael (Rochford)
Howarth, Alan (Strat'd-on-A)


Clark, Sir W. (Croydon S)
Howarth, G. (Cannock &amp; B'wd)


Clarke, Rt Hon K. (Rushcliffe)
Howell, Rt Hon David (G'dford)


Colvin, Michael
Hughes, Robert G. (Harrow W)


Conway, Derek
Hunt, David (Wirral W)


Coombs, Anthony (Wyre F'rest)
Hunter, Andrew


Coombs, Simon (Swindon)
Irvine, Michael


Couchman, James
Irving, Sir Charles


Cran, James
Jack, Michael


Critchley, Julian
Janman, Tim


Currie, Mrs Edwina
Jessel, Toby


Curry, David
Johnson Smith, Sir Geoffrey


Davies, Q. (Stamf'd &amp; Spald'g)
Jones, Gwilym (Cardiff N)


Davis, David (Boothferry)
Jones, Robert B (Herts W)


Day, Stephen
Kellett-Bowman, Dame Elaine


Dicks, Terry
Key, Robert


Douglas-Hamilton, Lord James
King, Roger (B'ham N'thfield)


Dover, Den
King, Rt Hon Tom (Bridgwater)


Dunn, Bob
Kirkhope, Timothy


Durant, Sir Anthony
Knapman, Roger


Eggar, Tim
Knight, Greg (Derby North)


Emery, Sir Peter
Knight, Dame Jill (Edgbaston)


Evans, David (Welwyn Hatf'd)
Knowles, Michael


Evennett, David
Lamont, Rt Hon Norman


Fairbairn, Sir Nicholas
Lang, Ian


Fallon, Michael
Latham, Michael


Favell, Tony
Lawrence, Ivan


Fenner, Dame Peggy
Lee, John (Pendle)


Field, Barry (Isle of Wight)
Leigh, Edward (Gainsbor'gh)


Finsberg, Sir Geoffrey
Lennox-Boyd, Hon Mark


Fishburn, John Dudley
Lilley, Peter


Fookes, Dame Janet
Lloyd, Sir Ian (Havant)


Forman, Nigel
Lloyd, Peter (Fareham)


Forsyth, Michael (Stirling)
Lord, Michael


Forth, Eric
Luce, Rt Hon Sir Richard


Fowler, Rt Hon Sir Norman
Lyell, Rt Hon Sir Nicholas


Franks, Cecil
McCrindle, Sir Robert


Freeman, Roger
Macfarlane, Sir Neil


French, Douglas
MacGregor, Rt Hon John


Fry, Peter
MacKay, Andrew (E Berkshire)


Gale, Roger
Maclean, David


Gardiner, Sir George
McLoughlin, Patrick


Garel-Jones, Tristan
McNair-Wilson, Sir Patrick


Gill, Christopher
Madel, David


Gilmour, Rt Hon Sir Ian
Malins, Humfrey


Glyn, Dr Sir Alan
Mans, Keith


Goodhart, Sir Philip
Maples, John


Goodlad, Alastair
Marland, Paul


Gorman, Mrs Teresa
Marlow, Tony


Gorst, John
Marshall, John (Hendon S)


Grant, Sir Anthony (CambsSW)
Marshall, Sir Michael (Arundel)


Greenway, Harry (Ealing N)
Martin, David (Portsmouth S)


Greenway, John (Ryedale)
Mates, Michael


Gregory, Conal
Maude, Hon Francis


Grist, Ian
Mawhinney, Dr Brian


Ground, Patrick
Maxwell-Hyslop, Robin


Grylls, Michael
Mayhew, Rt Hon Sir Patrick


Gummer, Rt Hon John Selwyn
Mellor, Rt Hon David


Hague, William
Miller, Sir Hal


Hamilton, Hon Archie (Epsom)
Mills, Iain


Hamilton, Neil (Tatton)
Mitchell, Andrew (Gedling)


Hampson, Dr Keith
Mitchell, Sir David


Hannam, John
Moate, Roger


Hargreaves, A. (B'ham H'll Gr')
Monro, Sir Hector


Hargreaves, Ken (Hyndburn)
Montgomery, Sir Fergus


Harris, David
Morris, M (N'hampton S)





Morrison, Sir Charles
Squire, Robin


Morrison, Rt Hon Sir Peter
Stanbrook, Ivor


Moss, Malcolm
Stanley, Rt Hon Sir John


Mudd, David
Steen, Anthony


Neale, Sir Gerrard
Stern, Michael


Needham, Richard
Stevens, Lewis


Neubert, Sir Michael
Stewart, Allan (Eastwood)


Newton, Rt Hon Tony
Stewart, Andy (Sherwood)


Nicholls, Patrick
Stokes, Sir John


Nicholson, David (Taunton)
Sumberg, David


Nicholson, Emma (Devon West)
Summerson, Hugo


Norris, Steve
Tapsell, Sir Peter


Onslow, Rt Hon Cranley
Taylor, Ian (Esher)


Oppenheim, Phillip
Taylor, John M (Solihull)


Page, Richard
Taylor, Teddy (S'end E)


Paice, James
Tebbit, Rt Hon Norman


Patnick, Irvine
Temple-Morris, Peter


Patten, Rt Hon Chris (Bath)
Thompson, D. (Calder Valley)


Pawsey, James
Thompson, Patrick (Norwich N)


Peacock, Mrs Elizabeth
Thorne, Neil


Porter, Barry (Wirral S)
Thornton, Malcolm


Porter, David (Waveney)
Thurnham, Peter


Portillo, Michael
Townsend, Cyril D. (B'heath)


Powell, William (Corby)
Tracey, Richard


Price, Sir David
Tredinnick, David


Raffan, Keith
Trippier, David


Raison, Rt Hon Sir Timothy
Trotter, Neville


Rathbone, Tim
Twinn, Dr Ian


Rhodes James, Robert
Vaughan, Sir Gerard


Riddick, Graham
Viggers, Peter


Ridley, Rt Hon Nicholas
Wakeham, Rt Hon John


Ridsdale, Sir Julian
Waldegrave, Rt Hon William


Roberts, Sir Wyn (Conwy)
Walden, George


Roe, Mrs Marion
Walker, Bill (T'side North)


Rossi, Sir Hugh
Waller, Gary


Rost, Peter
Walters, Sir Dennis


Rumbold, Rt Hon Mrs Angela
Ward, John


Ryder, Richard
Wardle, Charles (Bexhill)


Sainsbury, Hon Tim
Warren, Kenneth


Sayeed, Jonathan
Watts, John


Scott, Rt Hon Nicholas
Wells, Bowen


Shaw, Sir Giles (Pudsey)
Wheeler, Sir John


Shelton, Sir William
Whitney, Ray


Shephard, Mrs G. (Norfolk SW)
Widdecombe, Ann


Shepherd, Colin (Hereford)
Wiggin, Jerry


Shepherd, Richard (Aldridge)
Wilkinson, John


Shersby, Michael
Wilshire, David


Sims, Roger
Winterton, Mrs Ann


Skeet, Sir Trevor
Winterton, Nicholas


Smith, Sir Dudley (Warwick)
Wood, Timothy


Smith, Tim (Beaconsfield)
Woodcock, Dr. Mike


Soames, Hon Nicholas
Young, Sir George (Acton)


Speed, Keith



Speller, Tony
Tellers for the Ayes:


Spicer, Sir Jim (Dorset W)
Mr. Tom Sackville and


Spicer, Michael (S Worcs)
Mr. Tim Boswell.


NOES


Abbott, Ms Diane
Bidwell, Sydney


Adams, Mrs. Irene (Paisley, N.)
Blunkett, David


Allen, Graham
Boateng, Paul


Alton, David
Boyes, Roland


Anderson, Donald
Bradley, Keith


Archer, Rt Hon Peter
Bray, Dr Jeremy


Armstrong, Hilary
Brown, Nicholas (Newcastle E)


Ashdown, Rt Hon Paddy
Brown, Ron (Edinburgh Leith)


Ashley, Rt Hon Jack
Bruce, Malcolm (Gordon)


Banks, Tony (Newham NW)
Buckley, George J.


Barnes, Harry (Derbyshire NE)
Caborn, Richard


Barnes, Mrs Rosie (Greenwich)
Campbell, Menzies (Fife NE)


Barron, Kevin
Campbell, Ron (Blyth Valley)


Battle, John
Campbell-Savours, D. N.


Beckett, Margaret
Canavan, Dennis


Beggs, Roy
Carlile, Alex (Mont'g)


Beith, A. J.
Cartwright, John


Bell, Stuart
Clark, Dr David (S Shields)


Bellotti, David
Clarke, Tom (Monklands W)


Benn, Rt Hon Tony
Clay, Bob


Bennett, A. F. (D'nfn &amp; R'dish)
Clelland, David


Benton, Joseph
Clwyd, Mrs Ann






Cohen, Harry
Grocott, Bruce


Cook, Robin (Livingston)
Hardy, Peter


Corbett, Robin
Harman, Ms Harriet


Corbyn, Jeremy
Haynes, Frank


Cousins, Jim
Heal, Mrs Sylvia


Cryer, Bob
Henderson, Doug


Cummings, John
Hinchliffe, David


Cunliffe, Lawrence
Hoey, Ms Kate (Vauxhall)


Cunningham, Dr John
Hogg, N. (C'nauld &amp; Kilsyth)


Darling, Alistair
Home Robertson, John


Davies, Rt Hon Denzil (Llanelli)
Hood, Jimmy


Davies, Ron (Caerphilly)
Howarth, George (Knowsley N)


Davis, Terry (B'ham Hodge H'I)
Howells, Geraint


Dewar, Donald
Howells, Dr. Kim (Pontypridd)


Dixon, Don
Hughes, John (Coventry NE)


Dobson, Frank
Hughes, Robert (Aberdeen N)


Doran, Frank
Hughes, Roy (Newport E)


Douglas, Dick
Hughes, Simon (Southwark)


Dunnachie, Jimmy
Illsley, Eric


Dunwoody, Hon Mrs Gwyneth
Ingram, Adam


Eadie, Alexander
Janner, Greville


Eastham, Ken
Jones, Barry (Alyn &amp; Deeside)


Evans, John (St Helens N)
Jones, Martyn (Clwyd S W)


Ewing, Harry (Falkirk E)
Kennedy, Charles


Fatchett, Derek
Kilfedder, James


Fearn, Ronald
Kirkwood, Archy


Field, Frank (Birkenhead)
Lambie, David


Fields, Terry (L'pool B G'n)
Lamond, James


Fisher, Mark
Leighton, Ron


Flynn, Paul
Lestor, Joan (Eccles)


Foot, Rt Hon Michael
Lewis, Terry


Forsythe, Clifford (Antrim S)
Litherland, Robert


Foster, Derek
Livingstone, Ken


Foulkes, George
Livsey, Richard


Fraser, John
Lloyd, Tony (Stretford)


Fyfe, Maria
Lofthouse, Geoffrey


Garrett, John (Norwich South)
Loyden, Eddie


Garrett, Ted (Wallsend)
McAllion, John


George, Bruce
McCartney, Ian


Gilbert, Rt Hon Dr John
Macdonald, Calum A.


Godman, Dr Norman A.
McFall, John


Golding, Mrs Llin
McKelvey, William


Gordon, Mildred
McLeish, Henry


Gould, Bryan
McMaster, Gordon


Graham, Thomas
McWilliam, John


Grant, Bernie (Tottenham)
Madden, Max


Griffiths, Nigel (Edinburgh S)
Maginnis, Ken


Griffiths, Win (Bridgend)
Mahon, Mrs Alice





Marek, Dr John
Ruddock, Joan


Marshall, David (Shettleston)
Salmond, Alex


Marshall, Jim (Leicester S)
Sedgemore, Brian


Martin, Michael J. (Springburn)
Sheerman, Barry


Martlew, Eric
Sheldon, Rt Hon Robert


Maxton, John
Shore, Rt Hon Peter


Meacher, Michael
Short, Clare


Meale, Alan
Sillars, Jim


Michael, Alun
Skinner, Dennis


Michie, Bill (Sheffield Heeley)
Smith, Andrew (Oxford E)


Michie, Mrs Ray (Arg'l &amp; Bute)
Smith, Rt Hon J. (Monk'ds E)


Mitchell, Austin (G't Grimsby)
Smith, J. P. (Vale of Glam)


Moonie, Dr Lewis
Smyth, Rev Martin (Belfast S)


Morgan, Rhodri
Soley, Clive


Morley, Elliot
Spearing, Nigel


Morris, Rt Hon J. (Aberavon)
Steinberg, Gerry


Mowlam, Marjorie
Stott, Roger


Mullin, Chris
Strang, Gavin


Murphy, Paul
Straw, Jack


Nellist, Dave
Taylor, Mrs Ann (Dewsbury)


Oakes, Rt Hon Gordon
Taylor, Matthew (Truro)


O'Brien, William
Thompson, Jack (Wansbeck)


O'Hara, Edward
Turner, Dennis


O'Neill, Martin
Vaz, Keith


Orme, Rt Hon Stanley
Wallace, James


Parry, Robert
Walley, Joan


Patchett, Terry
Wardell, Gareth (Gower)


Pendry, Tom
Wareing, Robert N.


Pike, Peter L.
Watson, Mike (Glasgow, C)


Powell, Ray (Ogmore)
Welsh, Andrew (Angus E)


Primarolo, Dawn
Welsh, Michael (Doncaster N)


Quin, Ms Joyce
Wigley, Dafydd


Radice, Giles
Williams, Rt Hon Alan


Randall, Stuart
Williams, Alan W. (Carm'then)


Redmond, Martin
Wilson, Brian


Rees, Rt Hon Merlyn
Winnick, David


Reid, Dr John
Wise, Mrs Audrey


Robertson, George
Worthington, Tony


Rogers, Allan
Wray, Jimmy


Rooker, Jeff
Young, David (Bolton SE)


Rooney, Terence



Ross, Ernie (Dundee W)
Tellers for the Noes:


Ross, William (Londonderry E)
Mr. Thomas McAvoy and


Rowlands, Ted
Mr. Allen McKay.

Question accordingly agreed to.

Bill read the Third time, and passed.

Housing Support Grant (Scotland)

The Parliamentary Under-Secretary of State for Scotland (Lord James Douglas-Hamilton): I beg to move,
That the draft Housing Support Grant (Scotland) Order 1991, which was laid before this House on 17th December, be approved.

Madam Deputy Speaker (Miss Betty Boothroyd): With this it will be convenient to take the following two motions on the Order Paper: No. 3:
That the draft Housing Support Grant (Scotland) Variation Order 1991, which was laid before this House on 17th December, be approved.
No. 4:
That an humble Address be presented to Her Majesty, praying that the Housing Revenue Account General Fund Contribution Limits (Scotland) Order 1990 (S.I., 1990, No. 2550), dated 12th December 1990, a copy of which was laid before this House on 17th December, be annulled.

Lord James Douglas-Hamilton: I know that a considerable number of hon. Members hope to catch your eye this evening, Madam Deputy Speaker, and I therefore propose to keep my opening remarks brief.
The housing support grant system has now been with us for 12 years and the House is familiar with the way in which it operates. Essentially, housing support grant is a deficit subsidy paid to those local authorities which, on the basis of reasonable assumptions about income and expenditure, would find it difficult to meet the costs of council housing from rental income. Full details of the grant settlement for next year are set out in the relevant grant order, and I shall discuss them shortly.
I should like to express my thanks to the Convention of Scottish Local Authorities with which both grant orders have been discussed. Although the convention has expressed reservations about certain aspects of the settlement, I am grateful for the constructive and helpful approach that it takes in our annual discussion of these matters.
Before commenting on next year's settlement, I propose to spend a little time on the Housing Support Grant (Scotland) Variation Order. It makes changes in the amounts of grant payable during the current year. It is customary to bring forward a variation order if there is a significant change in the level of interest rates estimated to apply to local authority borrowing. For example, last year we brought forward a variation order to increase the level of housing support grant in 1989–90 by nearly £5 million because the estimate of the pool interest rate in that year had increased. This year, a significant change in the estimated pool interest rate has again occurred, but this time it is in a downward direction. We now estimate that the pool or average rate of interest for 1990–91 will be 10·1 per cent. That figure may be compared with the estimate of 10·2 per cent. used in the grant calculations for the Housing Support Grant Order for 1990–91 approved by the House a year ago. Because of this reduction in the estimate of the pool rate, the eligible expenditure of local authorities on loan charges in 1990–91 is now estimated to be less than it was when estimated last January. It follows from this that authorities need less grant than anticipated. Therefore, and in accordance with the usual practice, the variation order now before the House reduces the total amount of grant payable from £59·6 million to £58 million.

Dr. Norman A. Godman: I have a brief question. Why are the Government so appallingly harsh and insensitive in their dealings with Inverclyde district council? The council has appalling housing, with problems of dampness, and there is massive unemployment in the area. The housing problems are a disgrace. Yet we receive no help whatever from this supposedly caring Scottish Office Minister.

Lord James Douglas-Hamilton: I have visited the hon. Gentleman's constituency and seen the housing there. Some remarkable successes have been achieved. I tell the hon. Gentleman what I tell other local authorities. Of course, we shall provide as much public expenditure as we can, but thereafter it should consider all the other possibilities and make arrangements with housing associations and, indeed, the private sector. I vividly remember one street in the hon. Gentleman's constituency where, through an arrangement with Wimpey, the derelict houses have been renovated. It was significant that those who then occupied the houses were people who had lived in the local community previously. Such possibilities should be followed up by each local council.

Mr. Tom Clarke: Will the Minister do two things? First, will he enlarge on the strong representations which the Convention of Scottish Local Authorities has made on the matter? Secondly, will he accept that local councils such as Strathkelvin and Monklands—my two district councils—are genuinely worried that the order does not reflect the needs of the area? Does he accept that if there is a moratorium on housing grants, or if the calculation of sales of council houses is not matched by events, he will accept responsibility for that, agree to review it and introduce a measure that reflects the real needs which have been brought to his attention?

Lord James Douglas-Hamilton: The hon. Gentleman takes me away from the order, but I shall endeavour to answer his question. The crux of the matter is the gross allocation for 1990–91, announced in December 1989, of £418·3 million, excluding £3 million set aside for the urban partnerships, with the mid-year stock figure of 747,713. That represents an average investment per house of £559.
The gross allocation that we announced on 5 December for 1991–92, again excluding the £8 million set aside for the urban partnerships, is £406·8 million. The estimated mid-year stock figure is 727,277, representing an average investment per house of £559. That means that the spending per house will be maintained. However, the House must take into account that the stock decreases as a considerable number of council houses are sold. The final allocations will be made in due course.

Mr. Archy Kirkwood: Will the Minister give way?

Lord James Douglas-Hamilton: If I may return to the orders, I shall give way to the hon. Gentleman in a moment.
The main order for 1991–92 provides that the total grants payable next year will be £55·4 million. That sum represents the difference between the eligible expenditure and the relevant income of those authorities which, in the absence of grant, would have a deficit on their housing


revenue accounts. The main components of eligible expenditure are loan charges and management and maintenance spending. It is a deficit subsidy.
The loan charges which we estimate that authorities will have to meet in the next financial year are based on a projection of each authority's capital debt to the mid-point of the 1991–92 financial year, taking account of new borrowing and debt redemption. In order to calculate interest charges, we apply to these projections of capital debt the pool interest rate expected for local authority borrowing in 1991–92. Our present estimate of this rate is 10 per cent. I appreciate that interest rates fluctuate, but I can assure the House that, if there is a significant change in the estimate of the pool rate, we shall, as normal, bring forward an appropriate variation order. For the moment, our estimate of loan charges for all authorities in 1991–92 is £497 million.

Mr. Kirkwood: The variations in the notional interest rates are not worth a candle compared to the disruption that they will cause. Certainly they are not an accurate reflection of the real interest charges that smaller local authorities will have to pay. I understand that if one has a large debt it is possible to do a deal and finance one's borrowings at about 10 per cent. But it is impossible for smaller local authorities to do that. More importantly, will the Minister confirm that the Convention of Scottish Local Authorities made representations to the effect that such changes at this stage of the game make matters doubly difficult? It is the eleventh hour in the current financial year. The sums involved are not worth the disruption that the changes will cause.

Lord James Douglas-Hamilton: That point was raised by the hon. Member for Western Isles (Mr. Macdonald) when he brought a deputation to see me. I told him and the representatives from the Western Isles and his council that, if their anxiety about the pool rate of interest was shared by other authorities, I should be happy for the Department and COSLA to pursue the matter. The system which has operated for years was used in this case and the Western Isles received the second highest subsidy in Scotland—almost £4 million in housing support grant. That amounts to over £32 per week for each Western Isles council tenant. The national taxpayer contributes more towards the cost of Western Isles council housing than the council tenants.

Mr. John McAllion: rose—

Lord James Douglas-Hamilton: I wish to develop the argument. The hon. Gentleman can intervene again in a moment if he wishes.
The other major item of expenditure on housing revenue accounts is management and maintenance of the housing stock. Our estimate of eligible management and maintenance spending in 1991–92 is based on an assumed average spending level of £458 per house; that represents a 12·5 per cent. increase over the equivalent average for the current year. Hon. Members will be aware that the Convention of Scottish Local Authorities considers that that is not enough. On that point, I do not find its arguments convincing. During the current year, of the 21 authorities in receipt of grant, 10 are spending less on management and maintenance than the amount assumed in the grant calculations. That suggests that our management and maintenance assumption for grant purposes is not only reasonable but realistic.
On the income side, we are assuming that rents in 1991–92 will in each authority be set at an average level of £23·97 per house per week. That also represents an increase of 12·5 per cent. above the assumed rent for the current year. I stress that the rent figure of £23·97 which I have quoted is not a forecast of the average council rent next year; nor is it a recommendation to authorities about their rent levels for next year. It is the average rent which, for the purpose of grant calculations, we consider authorities should reasonably receive. The actual rent levels of individual authorities may be higher or lower, depending on their decisions about income and expenditure. I shall discuss in a few moments the implications of the subsidies settlement for actual rents.

Mr. McAllion: The Minister should know that Dundee expects its average rent level to increase to £28·18 next year simply because, once again, the Government refuse to give any housing support grant whatever to the council. Why are the Government prepared to subsidise the borrowings of owner-occupiers in Dundee such as me but are not prepared to give a single penny to subsidise the borrowings made on behalf of the district council tenants by Dundee district? He will be aware that Dundee tenants are paying 67p out of every pound to the moneylenders to which the Government force Dundee district council to turn.

Lord James Douglas-Hamilton: I cannot tell the hon. Gentleman why the allocations, as they stand, have been made to Dundee. I repeat that the final allocations have not been made. The provisional gross allocation announced for Dundee on the housing revenue account block amounts to £17·39 million. I am pleased to have been able to maintain Dundee's allocation at the same level as the corresponding figure for the current financial year. On a per house basis, there will be an increase of just over 5 per cent., from £498 to £524, per house. That means that the council should be in a position to maintain investment in its own housing stock at the level planned for 1990–91.

Mr. Bill Walker: With regard to the intervention of the hon. Member for Dundee, East (Mr. McAllion), will my hon. Friend confirm that housing benefit paid through the councils in Scotland was in excess of £380 million? That makes a bit of a nonsense of the hon. Gentleman's claim about the Government helping only those who have private dwellings.

Lord James Douglas-Hamilton: More than £380 million is spent through housing benefit on local authority tenants. That does not take into account New Towns' tenants, Scottish Homes' tenants or other tenants in the private sector. That £380 million is a substantial sum of money.

Mr. John Maxton: When will the Minister realise that housing benefit is a subsidy to the person who is in desperate poverty and not to the housing authority? If everyone was well paid, there would not be any housing benefit, but I bet that there would still be mortgage tax relief.

Lord James Douglas-Hamilton: I appreciate that the Government's policy has been to move away from generalised subsidies to targeting those subsidies much more to the individual. The levels of housing benefit have increased enormously in the past 10 years.
I wish to draw to the attention of the House one important aspect of the Housing Support Grant Order. Some time ago the hon. Members for Glasgow, Garscadden (Mr. Dewar), for Argyll and Bute (Mrs. Michie) and for Angus, East (Mr. Welsh) complained that the costs incurred by local authorities in dealing with homelessness had to be met from the housing revenue account and were therefore financed from council rents. With the agreement of COSLA, I have made it clear to all local authorities that that practice should stop. Therefore, local authority expenditure on homelessness, such as the cost of running homeless persons' units and the provision of assistance to voluntary organisations, will now be met from the general funds of authorities. That expenditure has been taken into account in determining next year's aggregate external finance settlement so that the burden will be shared between the taxpayer and the community charge payer.
One area of homeless expenditure, however, must continue to be met from housing revenue accounts for statutory reasons—the net costs of local authority hostels. It is our intention to bring forward legislation to exclude those costs from local authority housing revenue accounts as soon as an appropriate opportunity is available. In the meantime, we have made arrangements to ensure that the net costs of all local housing authority hostels in Scotland will be met by the Government through housing support grant. Those arrangements have been given effect in the main order before the House.
I invite hon. Members to note that the housing support grant hostel portion of £1,425,314 will be distributed among the 15 authorities shown in schedule 3 to the order. If we had not changed the arrangements, only five authorities would have received a share of a total hostel portion of only £384,000. The House will not be surprised to learn that the change has been welcomed by COSLA.
Our aim in providing that additional grant assistance through the HSG and revenue support grant is to ensure that local authorities are properly resourced to deal with homelessness. It is not, of course, the final or definitive answer to the problem of homelessness, but it is one example of the way in which the Government are prepared to help local authorities in that respect.

Mr. Thomas Graham: Is the Minister aware that Renfrew district council has been allocated £28,500 for homeless hostel accommodation? Does he realise that one can hardly buy a single-end in Paisley for that sum? How far will £28,500 go in helping the homeless in Renfrew? The Government live in cloud cuckoo land.

Lord James Douglas-Hamilton: Each authority knows its own problems and its own stock as well as, if not considerably better than, anyone else. It is for each authority to work out its priorities within the framework of its allocation. I expect authorities to give priority to homelessness.
General fund contributions represent a subsidy from community—

Mrs. Maria Fyfe: Will the Minister give way?

Lord James Douglas-Hamilton: I should get on, but I am willing to give way.

Mrs. Fyfe: What is the position of battered women in Scotland? The hostel accommodation provided for them meets just one tenth of actual need as estimated by refuge organisations.

Lord James Douglas-Hamilton: We changed the law in the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990 so that battered wives should be considered as homeless persons and counted as such. That change was welcomed. Before Christmas we also announced an additional allocation, extra to the resources originally allocated. We are now in discussion with four cities, including the hon. Lady's, and we hope to make the detailed allocations to those cities as soon as practicable when we have all the information. No doubt the hon. Lady's concern will be one of the issues under consideration.

Sir Nicholas Fairbairn: Will my hon. Friend give way?

Lord James Douglas-Hamilton: I cannot resist my hon. and learned Friend.

Sir Nicholas Fairbairn: Has my hon. Friend noticed that some local authorities, including my own, are not getting a bean out of this? People who live in modest circumstances are contributing to the constituents of Opposition Members in Dundee and elsewhere. That is what lies behind my hon. Friend's announcement tonight.

Lord James Douglas-Hamilton: My hon. and learned Friend makes a relevant point. When I visited his district council—

Mr. McAllion: The hon. and learned Gentleman's council is the only one on Tayside getting any Government grant. Our constituents are subsidising his.

Lord James Douglas-Hamilton: The hon. Gentleman will get an opportunity to speak in the course of the debate.
When I visited my hon. and learned Friend's district council, it was clear that it was interested in Scottish Homes' projects. Assistance is therefore available from a number of different hands.

Mr. McAllion: rose—

Madam Deputy Speaker: Order.

Lord James Douglas-Hamilton: I cannot make the hon. Gentleman's speech for him.
General fund contributions represent a subsidy from community charge payers to council tenants. Such subsidies are indiscriminate as they benefit all council tenants regardless of their personal circumstances. They are unnecessary to the extent that tenants who are unable to meet the costs of their housing receive assistance in the form of housing benefit. Therefore, I make no apology for our proposal that 48 of the 56 local housing authorities will be barred from estimating for such a contribution next year. The remaining eight authorities will be allowed to budget for varying levels of contribution amounting in total to £2·2 million. The level of those contributions has been calculated as the amounts necessary to restrict the average rent increase in each of the authorities concerned to a maximum of £2·50 per house per week.
I estimate that the combined effect of the subsidy proposals before the House will be that the overall average rent increase for council tenants in Scotland will be about £1024 per house per week, or 5·9 per cent. I should emphasise that that forecast is based upon the assumption that authorities will increase their spending on management and maintenance by 12·5 per cent. per house above their budgeted levels for the current year. That would bring average rents to a level of £22·14 per house per week in 1991–92. I do not regard such rent levels as unreasonable or excessive—they are lower than the current average rent levels of New Towns' tenants at £23·22 and Scottish Homes' tenants at £23·81. They are certainly well below those of local authorities in England at £23·74. I should add that those local authority tenants in receipt of housing benefit are protected against rent increases.
I believe that the proposals put forward tonight constitute a fair and reasonable subsidy package. They set an acceptable balance between the interests of the council tenant, the community charge payer and the taxpayer. We have consulted authorities about the orders, and I commend them to the House.

Mr. John Maxton: I have listened many times to this Minister and to previous Ministers speaking about housing in Scotland. I despair of their ever understanding that Scotland has a housing crisis, especially in the public sector, and that that crisis has existed for far too many years.
The Minister made it clear that many local authorities receive no grant whatever from central Government—either in housing support grant or through the general fund contribution. I point out to the hon. and learned Member for Perth and Kinross (Sir N. Fairbairn) that, of the three local authorities in the Tayside region—Angus, Dundee and Perth and Kinross—only Perth and Kinross receives any grant; the other two receive no grant whatever. The collusion between the two Members in suggesting otherwise is wholly unfair.
Every time the Minister comes to the Dispatch Box, he reads a brief that is complacent, to say the least, and paints a picture of housing in Scotland that no one—except Ministers and, presumably, the advisers who write their speeches—would recognise. Perhaps even they do not recognise it. Certainly no local authority facing the continuing deterioration of its housing stock, no housing charity and no academic researcher would recognise it. Most important, no tenant paying ever-higher rent for ever-poorer housing would see the house in which he or she lives depicted anywhere in the Minister's speech.
Everyone involved in Scottish housing has tried to show the Minister that there is a crisis. As long ago as 1986, the Confederation of Scottish Local Authorities spelt it out. Using Scottish Office statistics, the convention showed that more than 356,000 houses needed modernisation, 88,000 needed rewiring, 234,000 suffered from damp or condensation and more than 153,000 needed major or structural repairs. I make no apology for repeating those figures. I do so practically every time I make a speech on housing. No Minister has yet been able to refute them, no Minister has been able to say that they are incorrect and no Minister has been able to produce alternative figures.
Whether through housing support grant, through general fund contributions or through capital allocations,

the Government have failed to provide local authorities with the funds that would allow them to tackle this appalling problem. The crisis has almost certainly deepened since 1986. Ever-deeper cuts have meant insufficient money being spent on basic repairs and modernisation. The orders are part of that pattern. They represent cuts in housing expenditure that can only drive rents ever higher and lead to a poorer repair service and a further deterioration in Scotland's housing stock.
Before Christmas, the Minister seemed to recognise, at least in part, the desperate plight of the growing army of homeless young people. It appears that that recognition was short-lived. There is little point in the Minister's giving money to local authorities to spend on hostels for the homeless if he then takes all that and more away by other means, thus reducing the authorities' capacity to provide permanent homes for those same homeless people. There is no point in providing hostel accommodation if fewer houses are available for the homeless once their spell in hostel accommodation is up.
Let us look at the figures showing the total resources that local authorities in Scotland will have to spend on housing this year. The general fund contribution is to be reduced from £3 million to £2 million. If that is all that the Minister proposes to allow, there is little point in keeping the general fund contribution; one might almost say that it should be abolished. Only eight Scottish local authorities can use it. Housing support grant is to be reduced from £58 million to £55 million. Capital consents—the money that local authorities can borrow to spend on new buildings and major developments—have been reduced from £459 million to £415 million. Local authorities expected the total to rise, at least in line with inflation—from £520 million to £572 million—rather than being reduced to £472 million. That represents a cut in real terms of £100 million in the money that will be spent by local authorities on housing in Scotland during the coming year—hardly the increase that the Minister tried to pretend would take place.
Ten years ago, housing support grant was £228 million —in cash terms, not real terms. The general fund contribution—or rate fund contribution, as it then was —provided a further £100 million. Next year, the two together will provide only £57 million.
COSLA estimates that, since 1979, more than £1·5 billion of direct Government support has been cut from housing in Scotland. The House should remember that those are cash figures. In real terms, the facts are even more catastrophic. In 1979, 47 per cent. of local authority housing costs came from rents, 39 per cent. from housing support grant and 14 per cent. from then rate fund contribution. This year, 93 per cent. will come from rents, 7 per cent. from housing support grant and less than 1 per cent. from the general fund contribution.
All that has placed an intolerable burden on tenants. Rents in Scotland have risen from an average of £4·92 per week in 1979 to an average of £20·88 this financial year. COSLA expects that average to rise by more than £3 a week next year—whatever the Minister may claim to the contrary. A comparison of Scottish rents with equivalent rents in the north of England and the midlands will show the Minister that many Scottish authorities' rents are now far higher than those in England. He can arrive at the overall English average only by including the London boroughs and authorities in the south-east of England.

Mr. Bill Walker: What happens to those in receipt of housing benefit when local authorities push rents up? Is that increase paid for from the public purse?

Mr. Maxton: If local authorities—especially Labour local authorities—had some way of increasing rents only for those on housing benefit and of keeping rents down for the others, the hon. Gentleman might just have an argument. But every time local authorities increase their rents, they have to increase rents for all tenants, including those who fall just outside the housing benefit range, who are in the poverty trap. The hon. Gentleman does not realise that.
Rents in Scotland have risen on average by 350 per cent. since 1979. That is well above the rate of inflation. At the same time, the Government have continued to subsidise home owners through mortgage tax relief. We are not opposed to such relief for standard rate taxpayers, but we believe that there should be equality of treatment. Last year, mortgage payers in Scotland—including me, I admit—received £470 million in subsidies compared with the £58 million that the local authorities received for their tenants. Hon. Members may not realise that that £470 million is only about 6·5 per cent. of the United Kingdom total, which now runs at £6·5 billion. The Labour party seeks equivalence of treatment in those matters.
I accept that the variation order does not involve large sums of money. However, it cuts housing grant by £1·6 million at a time when more, rather than less, needs to be spent on Scottish housing. The Minister explained that this year's housing support grant was based on an interest rate of 10·2 per cent. The Minister has now concluded that a projected interest rate of 10·1 per cent. is more appropriate. Given the Gulf war and the present economic crisis, I do not understand how he reached that conclusion. I see no evidence to suggest that interest rates will fall. The Minister was asked by COSLA to delay his decision until he saw the economic position, but he refused. More importantly, he refused to give a guarantee that if his estimate was wrong, he would come back to the House with another variation order to increase the grant. I am happy to give way if he would like to give that guarantee now.
On the main Housing Support Grant Order, I have already shown that there is a further reduction in grant. The Minister described his decision and the increases as realistic. The Government will give an allowance of £458 per house for management and maintenance. This year local authorities are spending £485 per house and they expect to spend £543 per house next year just to maintain the present level of service. There is a significant difference. The housing support grant settlement should have been £62 million more simply to allow local authorities to stand still on housing expenditure.
Some authorities may be in trouble, too, over the element in their grant for loan charges. The Minister mentioned the Western Isles. That council believes that its grant, based on the average of Scottish interest rates, is far too low. Most of its loans have been taken out since 1975 at high interest rates; therefore it cannot compensate with the lower interest rates from before 1975. As a result, Western Isles council is faced with having to increase its rents by a minimum of £6·50 a week. It can do that only if it cuts maintenance costs by half.
While capital allocations are not officially part of the debate, we cannot ignore them when considering the money to be spent on public housing in Scotland. Here, too, cuts are taking place. Net consents—the money which local authorities can borrow without consideration of house sales—have risen by £24 million in the capital allocations given by the Minister, but expected receipts from the sale of houses have fallen by £68 million. As a result, local authorities will have £44 million less to spend this year on new build, redevelopment and help to the private sector. Yet again the Government refuse to recognise that there is a crisis in Scottish housing. They do not care that thousands of their fellow Scots live in substandard housing, with their health and the health of their children affected by dampness and cold. People on low wages, just outside benefit level, are struggling to find ever-increasing rents and are forced to trim their spending on food and heating. That is intolerable in a civilised society. The callous disregard of the Government and their Back-Bench Members for the crisis is disgraceful.
However, let me be marginally generous to the Minister: I do not think that he understands or knows what is happening. With his income, he does not appreciate the housing problems of other people. I should like to finish with an apocryphal story, perhaps, about the Minister, which illustrates well his total lack of understanding of Scottish housing and which also shows that he has no right to be a housing Minister.
On one occasion, when travelling in his official car in Scotland with a junior civil servant, to make polite conversation he asked the young man where he lived. The young man said that he had a flat in such-and-such a street in Edinburgh. The Minister replied, "That is very interesting: I have got a flat just around the corner. Tell me, where do you live at the weekends?" I think that that sums up the Minister's lack of understanding about housing.

Lord James Douglas-Hamilton: The hon. Gentleman is misquoting a piece of gossip produced in the Glasgow Herald. The last story was that this was a conversation overheard at an airport. There is only one senior official in the housing department in that category, and I know very well who it is.

Mr. Maxton: I will not reveal my source, but I assure the House that it was not idle gossip overheard anywhere. It came from a fairly reliable source. The story sums up the Government's attitude to housing and the Minister's understanding of housing. I ask my hon. Friends to vote against the orders to show our contempt for the Government's housing policy.

Sir Hector Monro: While I would not use the adjectives that the hon. Member for Glasgow, Cathcart (Mr. Maxton) used in opening his speech, it is no use trying to hide the fact that there are many housing problems in Scotland. Not that they are particularly new —in all the housing debates stretching back to 1964, one recalls criticism of the Government in power, whether Labour or Conservative, for not putting sufficient resources into housing. There is no doubt that housing is sometimes short in quantity, sometimes short in quality,


and sometimes both. We must try to move faster towards the production of houses of the standard that we require in the 1990s than we have over the last 20 years or so.
Some authorities have exceptionally good housing records; they have modernised existing houses and have built good new houses. It is a major worry that so many poor houses were built in the 1950s when everyone was cutting costs to the bone. The result was condensation, dampness and virtual reconstruction in the 1980s and inevitably in the 1990s. We have a long way to go before we can say that in Scotland we are even moderately satisfied with the overall quality and quantity of houses.
There have been 220,000 houses built since 1979. Successful council house sales have brought capital receipts to local authorities. One is concerned about the fact that more than 20,000 houses are empty in Scotland at any one time. That makes one raise more than one eyebrow about the quality of housing management in some areas.

Mr. Ron Brown: I am sure the hon. Gentleman is aware that Scottish Homes, a Government quango, has refused repeatedly to repair steel-framed houses in my constituency. Those houses may be regarded as substandard by Scottish Homes management, but it is utterly disgraceful that it is increasing rents by 14 per cent. in April when it is not doing the basic work required on those houses. What does the hon. Gentleman say about that?

Sir Hector Monro: I am coming to Scottish Homes; it was a great initiative of the Government and of my hon. Friend the Minister. Like the hon. Member for Edinburgh, Leith (Mr. Brown), I look forward to action by Scottish Homes in my constituency. I have raised the issue of the condition of some of the houses managed by Scottish Homes and so far I have had a negative response to requests for early improvement. I should like Scottish Homes to be much more active. I do not know the position in the hon. Gentleman's constituency, but I hope that when the Minister replies he will say more about Scottish Homes. I should like to know what capital investment Scottish Homes is likely to make in my constituency in the coming financial year.
My hon. Friend the Minister was good enough lo visit housing in Nithsdale in my constituency last autumn. I think that he was impressed by some of the new developments and by the housing manager and his staff. There is certainly disappointment there and in Annandale and Eskdale because those areas have not received a larger share of the cake that the Minister has been able to distribute under this order, under the housing revenue account, under the non-housing revenue account to a lesser extent, and, equally importantly, under capital consent. District councils are anxious to get on with improving their housing and with building new ones. To do that they must have more capital consent and more resources.
Last summer we held a useful debate on housing in the Scottish Grand Committee. I told the Minister then of my grave concern about homelessness. I have yet to see any dramatic improvement in this critical problem. I asked the Minister then and subsequently what steps were being taken to get to the bottom of the problem, which is not solely a matter of insufficient housing. People come to Dumfries from Ireland, the Western Isles, the Highlands

and central Scotland and in no time at all reach a high position on the housing list because they are homeless. That is most unfair to those who have lived in the area for many years and are looking forward to having a house when they get married—yet these outsiders jump to the top of the list.
I hope that great organisations such as Shelter, Age Concern and the Church of Scotland will make every effort to find out more about the root causes of this national problem, which is not merely to do with a lack of houses. Perhaps we could persuade people to stay a little longer with their parents or to move to areas with available housing. That might alleviate the problem to some extent.
I urge the Minister to reconsider how district councils should allocate priority between those who claim frequently rightly—to be homeless. The problem is getting worse, certainly for single-parent families. I often meet teenage girls with young children who, unfortunately, have been asked by their parents to leave home, even though they have recently had babies. We must try to find out why so many of these young girls are starting families when the fathers are not interested in sharing a home with them or even in helping to pay towards the maintenance of their children. Many of our problems of housing and homelessness stem not just from insufficient housing but from major issues to do with morality.
The Minister has worked hard at housing, especially with Scottish Homes. I should like to know more about what Scottish Homes proposes to do and about where it proposes to do it in the coming year. The organisation has been given a good lead by many of the housing associations. I offer warm praise to Loreburn in my area which has successfully built a large number of houses, many of them for people with special needs, and which plans many more developments. The Minister should encourage housing associations as much as he can. I should like Scottish Homes to share their enthusiasm; and perhaps it will—after all, it has not existed for long. I should like it to take more initiatives and to embark on more expenditure to modernise present stock and to help provide new homes.
Rather than going through the statistics in the orders, I should like to leave with the Minister the general impression that we have a great deal still to do before the quantity and quality of housing in Scotland can be called adequate. I appreciate that this year is financially difficult, given the Gulf crisis and rising costs, but when resources become available I hope that the Minister will agree that greater priority should be given to housing.

Mr. Michael J. Martin: I do not agree with what the Minister said about housing in Scotland. Of course, every local authority can point to model housing estates, and Glasgow is no exception. But hon. Friends who have been involved in recent by-elections will agree that every community has its bad housing estates too—for instance, in Govan, in Tewanhill and in other areas that have come to be known as wine alley. There is one in Paisley, too. Some of this housing is in deplorable condition not through any fault of the local authority but because of a history of serious social problems.
The Minister has not faced up to this crisis; he certainly has not tried to help local authorities. He knows full well


that the provisions that we are debating are a follow-up to the housing support capital allocation announced in December, as a result of which every local authority in Scotland felt sadly let down by the Government.
My local authority in Glasgow had planned an investment programme of £120 million. Because of the Government's decision, that has fallen to £87 million—a cut in real terms of 20 per cent. That will affect the current budget but, by their very nature, delays in this year's housing programmes—many have already been delayed —have consequences for 1993 too, as the Minister knows.
Every time housing is debated in this Chamber the hon. Member for Tayside, North (Mr. Walker) and the hon. and learned Member for Perth and Kinross (Sir N. Fairbairn) mention peripheral estates in Glasgow, often blaming the city of Glagow for them—

Sir Nicholas Fairbairn: rose—

Mr. Martin: The hon. and learned Gentleman knows that my colleagues want to speak and that it would be unfair of me to give way to him in such a brief debate. I know that I mentioned him, but he will have a chance to respond later.
Conservative Members blame the local authorities for peripheral estates in which houses sit empty. The Minister and the Secretary of State have often said that we cannot build more houses in these cities, because plenty of them are lying empty. The local authorities have embarked on joint ventures with Scottish Homes and with the private sector, and sometimes they would prefer to do what the Government want them to do: to rehabilitate houses and put them up for sale. However, because of recent Government decisions, these houses will continue to lie empty, and for so long that they will not be able to be rehabilitated. The vandals will move in, the weather will take its toll and mass demolition will follow. Then the Tory press and the Government will blame the Labour-controlled authority.
Many of my constituents live in fear of break-ins by people with drug problems. My house was recently broken into and I understand that the perpetrator was a drug addict. That is happening not just to me but to people who are the poorest of the poor. They are living in fear.

Mr. David Lambie: You are not poor.

Mr. Martin: My hon. Friend says that I am not poor. I am not as rich as he is, but I am certainly not poor, although I have not got to the Council of Europe yet.
Council tenants live in fear of break-ins and have made representations about it to the local authority. It was planned that many projects in my area would be brought forward to give protection to tenants, particularly the elderly and the disabled, but once again, because of the Government's decision, these elderly and disabled tenants will not get the alarm systems that would make them feel secure, particularly on winter nights. The Minister must know that these are the fears expressed by people when they come to constituency surgeries. They say that they want to move out. I tell them that theirs is a good house, but they persist in wanting to move because there have been too many break-ins in the area.
The Minister must help local authorities to ensure that people stay in the housing estates and thus relax the pressure on the houses that are in high demand. That applies particularly to multi-storey flats. I must have more of them than any hon. Member, and I know that those which have a concierge service to stop outsiders coming and going have now become desirable places in which to live. The children have been moved out of them and they are for middle-aged couples and sometimes single people, who are keen to live there provided that they have protection at the front door and also provided that vandalism does not take place in the lifts, causing them to have to walk up 20 flights, or 30 in the case of the Redwood flats. It would be simple and cheap to get this concierge service into every multi-storey block in Glasgow, but we need the help of the Minister to do it.
Housing officials have now identified Coll Place in my constituency, a full multi-storey block which is now empty, as somewhere that can be turned into furnished accommodation for students and young people who are not interested in long-term lets. But I now have a full multi-storey block which is empty; there is not a soul in the entire building. It is depressing for the people in that community. The officials tell me that, because the Secretary of State will not help, there will be no money available. Nor am I making a case for my own constituency alone. They have identified other places—Castlemilk, Pollok, Easterhouse and other parts of the city —where projects will have to be abandoned.
One would have thought, however, that the Conservative party's pet organisation would be Scottish Homes. One would have thought that, with a community-based housing association movement and all the other projects in which Scottish Homes is involved, it was something the Tories would want to give money to, but I am told that in real terms the non-housing revenue allocation expenditure will drop by 17 per cent. What that means is that where young couples are not being allocated houses, because the areas are popular and the houses have been bought by the sitting tenants, they are turning to Scottish Homes. But Scottish Homes cannot help them unless they get the finance. The Minister knows that.
The Conservatives have always claimed to be the champions of the private sector, but in Glasgow there are 400 cases in a backlog of statutory repairs required in the private sector. The 400 cases are mainly of elderly people living in old tenements in the Duke street area of my constituency down in Denistoun, where the roofs leak and the walls are damp and no help is forthcoming from the local authority. What annoys me is that when grants for repairs are refused it will not be the Government or St. Andrew's House who will get the blame but George Square and district councils.
In my constituency we have "four in a block" houses. They are popular. They have side doors and a garden and are very good for families. I had one and was happy for the children to be brought up in such a house. It only needs one tenant to buy one of those four in a block when the other three are still owned by the local authority and problems arise. The local authority may carry out improvements to the block but, because of a decision by the Government, it cannot give any grant to the tenant who has bought his house, even though he has been encouraged by the Government through leaflets and press


propaganda to buy his house and even though he has been told that if the house is old he will be given a grant to do it up.
I am not opposed to tenants buying their houses. When I was a councillor in Glasgow I supported the selling of selected houses to try to encourage young couples to stay in communities consisting mainly of elderly people. But I put it to the Minister that if he is really proud of what local authorities are doing—and I know that he is because he loves coming to open new projects; he has been up to Springburn and he has had a great welcome, and there are plaques on rehabilitated houses to show that he has opened them—and if he wants that positive action to continue, he must help the local authorities rather than hinder them.

Mr. Bill Walker: The hon. Member for Glasgow, Springburn (Mr. Martin) has demonstrated his deep knowledge of housing in his constituency. Through his speech ran the thread of what he wants, which is some innovative and progressive thinking. That is really what he was saying. We have had problems in public sector housing in Scotland for a long time. Anyone who thinks differently is not facing up to the real issues. Many of our citizens have been forced by circumstances to live in totally unsuitable houses and have had to put up with condensation and damp. I vividly remember our inspection of houses during visits to Glasgow and elsewhere, but particularly to some of the housing schemes in Glasgow. The desperate problems that must be tackled were quite obvious.
There is also the problem of "homelessness". It is rather an umbrella word because it covers everyone who has no permanent home. Hon. Members will know that for a long time I have been interested in the problems of people who find themselves in this position. I cannot describe my investigations as comprehensive or sufficiently deep to provide complete answers, but at least I care enough about these things to become involved. That is true of everything that I do. Opposition Members may doubt some of the proffered solutions, but I care as deeply as they do about problems on housing estates. An Opposition Member who is present in the House grew up on the same housing estate as I did.

Mr. Maxton: The hon. Gentleman appears to be concerned about this matter. I assume that he will join us in the Lobby to show his contempt for Government cuts.

Mr. Walker: The hon. Gentleman should be patient. I shall deal with his speech in a moment. His background and circumstances are quite different from mine and we need no lectures from him or anyone else. I hope that we are all looking for ways to improve the lot of people whose circumstances are totally unsatisfactory, although we may disagree on how we can achieve that end.
I shall now deal with the humbug in the speech of the hon. Member for Glasgow, Cathcart (Mr. Maxton). He accused my hon. Friend the Minister of not caring and not understanding. That is a travesty of the truth because every hon. Member knows that the Minister is one of the most caring and interested Members in the House. The hon. Member for Cathcart will know that many people leave Edinburgh at weekends to come to ski in my constituency. That means that many people living in flats

in Edinburgh are not there at the weekends and it is nonsense to pretend otherwise. In this modern and mobile world it is wise to concentrate on those who have problems and say "Good luck" to those who have not.
We are speaking about taxpayers' support for housing. In Scotland more than 20,000 council houses are empty. Hon. Members have spoken about some of the problems and I have been interested in some of the solutions. I have many times criticised Dundee district council, but I hope that that council will agree that I also compliment it when that is required. Some of the innovative housing projects and new schemes near the centre of Dundee are a credit to that council. They are also a credit to co-operation among the private sector, the housing associations and the district council. We must continue to move down such innovative routes.
The hon. Member for Cathcart had some nasty things to say about mortgage tax relief. Presumably he was speaking for the Opposition and would suggest that such tax relief should be abolished. Mortgage tax relief allows people to keep their own money. We are discussing how taxpayers can assist people who are in need, and mortgage tax relief is one aspect of the housing issue. The Government's policy of selling houses and giving people the opportunity to buy at substantial discounts is another way to ease Scotland's housing problems. One of the most notable features of housing estates on which houses have been sold is the improvement in the environment. On such estates vandalism generally decreases because people do not vandalise their own property.
Opposition Members constantly overlook the fact that since 1979 Government policy has sought to direct taxpayers' funds to people in need and not to offer a blanket approach to problems. I approve of that because if public funds are not targeted they will not provide good value. Housing benefit has been deliberately targeted at those whose income, wherever it comes from, is below a certain standard. That benefit, which is taxpayers' money, has risen to more than £380 million in the past year and is for council house tenants only. [Interruption.] Allowing someone to keep his own money is not the same as directing taxpayers' money to those in need. A better understanding of the use of finance would take us nearer to implementing some of the innovative solutions with which I agree.
Housing benefit is paid to the people in greatest need, and the opportunity to buy at discounted prices goes to another group. Now we are moving into the area highlighted by the hon. Member for Cathcart which is just outside the area of housing benefit. There will always be people who are just outside that area and the Government rent-to-buy scheme is deliberately designed for such people. They can buy their property at a discounted price and enter into an arrangement whereby if at some future date the property is sold they will share the increase in its value.
All those schemes deal with social problems, such as the problem of vandalism on many large estates. We must deal with that and part of the solution—not the only solution —is to give more people a stake in their property, thus reducing vandalism and increasing in the community the feeling that the property is theirs and that they can take steps to protect it. I am astonished that some Opposition Members cannot see the benefit of that. The rent-to-buy scheme, which is still in its early stages but doing well, deals with that.
I shall now deal with those who are in need of houses for whatever reason. [Interruption.]

Madam Deputy Speaker (Miss Betty Boothroyd): Order. I should like to call all hon. Members who wish to speak. To that end, it would be helpful if hon Members did not engage in sedentary barracking but saved their breath until they were called.

Mr. Walker: Opposition Members think that they are being flippant and clever. If they are concerned about those in real need they should separate them from people who are not in real need, of which there are some.
Let us look at the casual homeless problem. In my constituency we understand that because we have much of it. Berry pickers come to Blairgowrie and the surrounding area. Many of them have homes in other parts of Scotland, but when they find that they like my constituency they decide to stay. I have dozens of examples from my surgery. That problem must be addressed by Perth and Kinross district council because those people register themselves as homeless and are put up in accommodation such as caravans. We must not confuse those people with people who are genuinely homeless as a result of factors over which they have no control. Such people are placed on housing lists for many reasons. Perhaps they got married and went to live with their parents. Children invariably come along and we all know what happens in such situations. The problem is complex and not as simple as some people suggest.
I have studied the problems of people who sleep in cardboard boxes and I discovered that more of those people than I had expected said categorically that they would not accept hostel accommodation even if it were offered to them. I am delighted to say that the Salvation Army in Scotland has confirmed that more than once. Those people had chosen this particular way of life and it turned out that some had a drink problem. What I did not know, and was unable to ascertain, was whether the drink problem was the result of the way they lived or whether the way they lived was the result of their drink problem. Whatever the answer, there was some factor in their lives that was creating a difficulty.
There are some of these individuals not far from this very place just along the Embankment, if hon. Members want to talk to them. I have spoken to some of those people and they have told me that they would not go to hostel accommodation because it would interfere with their way of life. The Salvation Army has confirmed that in Scottish main cities a substantial number of such people will not accept its empty hostel beds. That is another problem to which I draw attention.
Nobody to whom I have listened who has made any attempt to study the matter thinks that if the Government give the local authorities more money in whatever way that will resolve the problem. In my view, that is a matter of hope over experience. I believe that the Government quite properly should target public funds, and I think that we could target them much more.
I believe that the voluntary bodies must be involved. The housing associations, Scottish Homes and so on must all be part of the effort to find an answer. I am very happy to say that in my constituency a number of bodies are working to try to find answers. I hope that in due course

they will get the sort of assistance which they all say public funds should give. But I believe that such funds should be given only to clearly thought-out, clearly presented projects on a one-off basis. One of the great mistakes in housing in past years is that we have not looked at the revenue implications of some of the ideas. This includes the building of some high-rise flats and so on.
I have spoken for a little longer than I had intended, but hon. Members opposite provoked me to do so and I thought that I should respond.

Mr. Charles Kennedy: I propose to be brief, and I shall speak mainly about the effects of these orders on several local authorities in the highlands area. It is worth underscoring at the outset the point made by the hon. Member for Glasgow, Cathcart (Mr. Maxton) in looking at the overall expenditure pattern. These orders represent in real terms, allowing for inflation, a reduction of £100 million for Scottish public housing. That is the basic position. Broken down on an individual constituency basis, although local authorities have their variations and some come off not quite so badly and others come off slightly worse, in real terms it results in a significant loss across the country as a whole.
My specific comments deal in the main with the effect of these orders on the Ross and Cromarty district council, to a lesser extent on the Inverness district council, which straddles both my constituency and that of my hon. Friend the Member for Inverness, Nairn and Lochaber (Sir R. Johnston), and on Lochaber district council as well. Within the mainland highland region—though I am sure that the hon. Member for Western Isles (Mr. Macdonald) will deal later with the specific problems faced by the island authorities—in that order of priority those are the areas most adversely affected.
Let me deal with the variation order first. The difference in Ross and Cromarty involves a reduction of about £60,000. In the Inverness district, the equivalent reduction is just under £50,000, and Lochaber will suffer a reduction some way below that figure.
As the Under-Secretary of State said in opening the debate, the main reason for this is the downward revision of the so-called pool interest rate on which the original grant calculations were based. The pool interest rate is reduced from 10·2 per cent. in the main order to 10·1 per cent. in the variation order. It is not realistic to suppose that Ross and Cromarty can secure borrowing at that rate of interest in the current economic climate. It may be possible that for Glasgow, where the sums involved are huge, special arrangements can be made, but for the small-scale rural authority, in the current economic climate and with present interest rates, there is no viable alternative.
During the current year, Ross and Cromarty's interest payments have increased by £345,000 above the amount allowed for in the housing support grant calculations. In addition, the amount of debt redeemed during the year is £177,000 higher than that allowed for in the calculations. As a consequence of the changes, the council is paying interest charges of £522,000 above the level assumed in the housing support grant calculations. For a council with a budget the size of that of Ross and Cromarty, a £522,000 downside in the housing budget is very serious.
The council has been endeavouring to make administrative savings and, of course, it has cut its expenditure on repairs and maintenance. Nevertheless, at this point—and the council gave me the figures today—it faces a deficit on the housing account of £240,000. With only three months of the financial year remaining, the only option available to the council is to fund certain repairs from capital expenditure. That will reduce the amount available for new build and for what was previously regarded as essential and often long overdue refurbishments and improvements. I hope that the Minister will comment, if not specifically on Ross and Cromarty, at least on the general point that I am making.
The Minister will know from correspondence between his office and myself that I can cite many examples, especially in Easter Ross, Alness and Tain, of much public dissatisfaction and frustration about the delays and cancellations of necessary improvements. There are also problems for the west coast, but I shall deal with those later.
The main order would result in a cash reduction in housing support grant of £133,000, again based on a further reduction in the pool interest rate, this time down to 10 per cent. The council believes that it will not be possible to fund replacement borrowings at that rate, given the same problems of the general economic climate. What does that mean for the rents being levied within the Ross and Cromarty district? I have read the excellent brief prepared by COSLA which has been circulated to hon. Members. It shows that over the next year the average rent rise will be £3.
Within the Ross and Cromarty district, the combined effect of the main order and the variation order will be that, at current expenditure levels, the increase in rent will be about £240 a year, which is £4·68 a week. That is the increase required to balance the housing account. It is significantly above even what COSLA estimates will be the average figure for Scotland. It is a 22 per cent. increase. That cannot be right in an area that already suffers higher general overheads for daily living, transport and travelling costs, and so on.
It must be emphasised that the only alternative available to the council that would avoid increasing rents by more than double the rate of inflation would be, as in the previous category, to transfer certain costs from revenue to capital. There are two main problems with that. First, it increases the cost of the work, and, secondly, it further reduces the ability to finance new build and improvement projects. It should be noted that the council's net consent for capital expenditure on housing has already been reduced by almost £600,000 between the financial years 1990–91 and 1991–92.
In essence, there are three points that I wish to stress to the Minister. In terms of the local authorities—Ross and Cromarty in particular, but the same applies to the others—the calculations on which the housing support grant decisions are based have given totally unrealistic estimates of the rates at which councils in these categories are able to borrow, given current interest rates and economic forecasts. Secondly, for Ross and Cromarty district, the level of debt redemption in both the current year and next year has been seriously underestimated. Thirdly, as a result of a substantial gap between the levels of capital charges supported by the housing support grant and those incurred by the council itself there will inevitably be an excessive burden on council house rents while at the same

time reducing capital allocations and therefore creating substantial delays in carrying out much needed house improvements. That is hardly a happy or successful situation for a local authority.
Given that dampness is such a problem in public authority housing in Scotland—people have long enough memories to recall the Scottish Select Committee and they will remember the report that was done in that context—and given the difficulties of geography and climate in the north of Scotland, the position is even worse there. Also, there are the extra fuel and transport costs in new build, not least for the west coast of Scotland, and the lack of private land for public housing in many parts of the highlands. Upward pressure is being exerted on house prices as a result of people decanting from central Scotland and the south-east of England and inflating property prices in the highlands. Thus, we have rising rents and lowering standards in the public sector, further pressures on local authority budgets and personal household budgets and the likely setting back or cancellation of much needed refurbishment and repair. This results in more dampness, more condensation, more frustration and more human unhappiness. That is a miserable state of affairs.
Far from coming forward with a variation order tonight to claw back still more money from the local authorities in Scotland, the Minister should be reversing spending priorities, not just for the highlands but for many other parts of the country as well.

Sir Nicholas Fairbairn: I shall be brief and I do not wish to be controversial because I want my point to be appreciated by both sides of the House, by all parties and all of us who live in Scotland.
Tonight we are discussing two matters, essentially: the civilisation and quality of life which a house gives to a family or the person who lives in it, wherever in Scotland it may be, and the money that local authorities spend on making that provision. One of the scandals, the vandalisms, of our lifetime has been the destruction of the extraordinarily cheap but solid and wonderful houses in the cities of Dundee and Glasgow. These houses could and should have been modernised as those that remain have been so that they are infinitely better homes than the "new build"—I use that appalling phrase in appalling English, far less Scottish, which was used by the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy). I assume that he means new houses. It always has been and always will be infinitely more expensive to knock down houses that are well built and replace them with rubbish. It is one of the social scandals of our generation that in Glasgow vast schemes have been built without a pillar box or a shop. They are vast places with more people than the city of Perth. I am not criticising Glasgow, rather trying to draw attention to a problem. Money will always be limited and there will always be a complaint that not enough has been provided.
I am concerned that the money that is available should be well spent in order to achieve a single objective— to improve the environment, the housing and the dwellings, whether in Perth, Kirkcaldy, Glasgow, Dundee, Ross and Cromarty or wherever. That is the problem which hon. Members on both sides of the House should be addressing,


rather than making party political points about whether it was a red council, blue council, pink council, tartan council or any other council that got it wrong.
We are not talking about damp in houses; we are essentially talking about what the hon. Member for Ross, Cromarty and Skye called new build—whatever that is. We are talking about houses that are badly and expensively built and on which local authorities, whichever ones, spent far more money than would have been necessary if they had done up the houses that were replaced.

Mr. Kennedy: I shall not engage the hon. and learned Gentleman in a discussion about vocabulary; I rather agree with him. But will he tell me, in his analysis which is broadly correct, where between Achiltibuie and Glenelg he would renovate all the houses and so do away with new build?

Sir Nicholas Fairbairn: I could, but it would not be useful to do so. If the hon. Gentleman was interested, I am one of the few Members of the House who could do that, but I will not. I could give him some good examples.

Mr. Kennedy: Give me one.

Sir Nicholas Fairbairn: For example, Achiltibuie—the hon. Gentleman pronounced that in the Scottish way, not in the English way in which he used the words new build—is one of the most sensitive villages in Scotland, and new build, as the hon. Gentleman calls it, has taken place along the shore as if Achiltibuie had none of the glorious surroundings that it has. That is a disgrace. I can tell the hon. Gentleman exactly what I would have done with Achiltibuie, and he knows it. If he represents Achiltibuie, he should be proud enough of it not to want to see it ruined in that way. Hon. Members should not imagine that I do not know about Achiltibuie. I could go right along the coast if the hon. Gentleman wanted me to from west to east, east to west and north to south. I shall not be caught out by that sort of stupid question from somebody who uses language that is incomprehensible to most hon. Members.
I am making a serious point. It is essential that we should not repeat the scandal that resulted in 50,000 or 30,000 people being dumped in what was then called new build, ripped out of the heart of Glasgow, Dundee or wherever else and dumped on the edge, adding travel costs to their expenses and putting them not into better houses but into infinitely worse houses.
That has been one of the scandals of our generation and no hon. Member on either side of the House should be talking about how much money we threw at the problem. We wasted hundreds of thousands of millions of pounds. We created social and criminal problems and a disgraceful environment for our people. Take, for instance, the street in Glasgow that runs from the High Court, where people are tried, to the Tron, where they drink. People were thrown out of there and settled in the city's environs. They were put into poor environments where they had no relationships. Now places like that street have been restored, and I am glad to say that people have come back. That, I trust, is the hope of hon. Members in all parties. However, it will be achieved only if local authorities are responsible, sensitive and careful.

Mr. David Marshall: Like all other hon. Members, I am once again indebted to the Convention of Scottish Local Authorities. It always sends us excellent briefs on orders such as these. My hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) highlighted what I think is the main point in this brief and it is worth repeating. I refer to the fact that, in general terms, these order involve a reduction of £48 million in total resources. In real terms—when inflation is taken into account—the reduction amounts to £100 million. In view of the problems that council tenants face, that is an absolute scandal.
I was fortunate to be able to participate in the corresponding debate last year. On that occasion I drew attention to the awful Catch-22 situation affecting the 998 Winget-type houses in Provan and Shettleston in the east end of Glasgow. Suffice it to say that a year later not a single thing has been done to help any of the poor people living in these substandard houses. These orders will not improve the situation one wee bit; in fact, they will make it worse. Help for these tenants is further away than it was even a year ago.
I should like to illustrate the increasing misery that continued and repeated reductions in housing support grant cause to my constituents, living, as they do, in an area with one of the highest levels of unemployment in Scotland—in fact, the sixth highest, with 4,421 people out of work on 13 December. In addition, the constituency has one of the highest numbers of old-age pensioners in Scotland and I shall draw the plight of some of those pensioners to the attention of the House.
The Pensioners Action Group East has sent me a list of problems that a very tiny survey brought to light. Mrs. Sadie Hart, herself a pensioner and secretary of PAGE—and a person who was awarded the Lord Provost's award for her work in the community a few years ago—is rightly very concerned that many of her members may not survive this winter unless something is done to improve the housing conditions in which they are forced to live. In her letter to me Mrs. Hart states that the possibility of deaths caused by hypothermia is her greatest fear.
I should like to quote some figures contained in the report of the PAGE survey. Fifty-two people were involved—42 females and 11 males. The average age was 73, the youngest person being 60, and the oldest 93. The shortest tenancy involved was six weeks and the longest 26 years. Of the 53 people, 49 stated that they had health problems. These included arthritis, diabetes, heart conditions, thrombosis, high blood pressure, eye problems, emphysema, chronic bronchitis, bladder conditions, leukaemia, angina, asthma, fluid retention, rheumatism, osteoporosis, ulcers, bone disease, kidney complaints, strokes, spondylitis, thyroid complaints and war wounds. It is sad that in this day and age people suffering from war wounds are living in substandard houses.
Forty-four of the people surveyed stated that their houses were very cold; 46 said that the windows were very draughty; 36 use the central heating system, and 12 do not because it is too expensive. Presumably those who do not use central heating simply cannot afford it. The average cost of the heating bills over a two-month period was £97·90. The cheapest bill was £24 and the dearest was £180.
Most of the complaints were that the houses were very cold, the windows were draughty and the under-floor heating too expensive. The sad truth is that the council does not have the resources to do anything to help those tenants, most of whom are elderly ladies who live alone. We, and in particular the Government who are in charge, should he thoroughly ashamed about that.
The survey was carried out in three streets in the Sandyhills area which is generally regarded as one of the best areas in my constituency. If the survey shows the position of old people living in one of the best areas, God knows what it is like for people living in the worst houses in the worst areas. The Government do not give a damn about that. I am sorry to have to say that, but until the Minister does something, his words mean nothing.
The third east end community conference was held in October and the Scottish Office was invited to send a representative to it, but none turned up. The conference covers the former GEAR area, with which the Minister is familiar. It was horrified to be presented with the east end housing plan drawn up by the district council. It is the first thoroughly researched document about the condition of all the houses in the east end of Glasgow. If the Minister has not seen a copy of that report, I will gladly send him one. The report is a couple of inches thick.
The synopsis on investment states:
The needs of each estate in the Council sector are analysed, calculating that £230·7 million is required to bring all houses up to modern standards including heating, insulation, security and environmental improvements.
That is not too much to ask for. The report continues:
In a 10 year programme, a shortfall of £15 million every year requires the Council to decide on where it will concentrate its own resources, and where it will have to look to others for assistance.
My hon. Friend the Member for Cathcart was absolutely right. There is a crisis in Scottish housing which the Government are deliberately ignoring and for which they will rightly pay the penalty at the next general election.

Mr. William McKelvey: I must compliment Kilmarnock and Loudoun district council because I telephoned the council this evening requesting a brief and it sent me a swatch of papers. I will not read them to the House, but I have perused them and they show clearly that the council's current financial position means that, unless additional resources are made available to it, there will be a shortfall of more than £2·5 million in its capital programme for 1991–92. The programme includes figures that have been updated to current costs.
That shortfall in resources will require the district council to reconsider investment in its housing stock which will entail extremely difficult choices and decisions in relation to several essential projects. Having examined the details, it is clear that all those projects are desirable and essential to improve the housing stock. Some of them will have to be delayed and, tragically, some might have to be obliterated from the programme for many years to come.
Kilmarnock and Loudoun district council is very concerned, as I am, that no specific allocation has been made to tackle the problem of homelessness in the area. Like all hon. Members, I understand that cities have particular problems with homelessness because homeless people are attracted to cities. But that does not mean that areas like Kilmarnock do not have a homeless problem.

Therefore, pro rata, such areas should have been considered seriously and finance should have been made available so that those areas can begin to tackle what is becoming a growing problem. Throughout Scotland small towns and villages need financial assistance to cope with homelessness. The Minister cannot avoid his responsibility to examine that matter.
The council's community alarm system is an important apparatus for many elderly and infirm people in Kilmarnock. It enables elderly people to have a direct connection with someone operating a central computer. That person is able to provide immediate assistance when those elderly people are in distress or trouble. The system cannot be counted in terms of money. The council should be able to bring many more elderly people into the scheme and provide them with the security that they deserve. I hope that the Minister will take cognisance of that point and reconsider the allocation of funds to Kilmarnock and Loudoun district council. Only an extra £60,000 was budgeted for the extension of that scheme this year. This should have been the year of care in the community, but the Government have put back that programme, which means so much to many elderly and infirm people.
The Minister came to Kilmarnock in 1989 and he was extremely well received. Much work was done on his behalf. When it was known that a Scottish Minister was coming to Kilmarnock, it was rather like the film the "Quiet Man". People said, "We will line up and give him stick when he gets off the train at Kilmarnock." I had to explain that it would be unlikely that he would be catching a train, as trains to Kilmarnock were few and far between. However, I convinced them that they should not only queue to see the Minister but should cheer him because we wanted the Minister to see the problems of Kilmarnock. We hoped that that would have an effect on him and that something would be done. We were very glad for the housing improvements that he helped to bring about in Kilmarnock. However, that does not negate his responsibility to continue that improvement and to help to alleviate the difficult housing problems in Kilmarnock.
The Minister must have seen, as I did when I first went to Kilmarnock 12 years ago, that the housing stock there is much better than that in many other areas. For instance, we do not have the problems associated with multi-storey blocks. By and large, the housing stock was very good. Much of it was ageing, but it was very good. A marvellous programme of refurbishment and rehabilitation has been undertaken. It must be seen to be believed.
The council was bitterly disappointed with the lack of progress made with the Minister's officials after more than one visit. The documentation I have, including copies of letters to the Department, points out the problems. They are no exaggeration. It is not acceptable that the grant is almost half what was requested. The council asked for a non-HRA capital consent of £785,000 but it was granted £408,000. Because of that, the voluntary improvement and repairs grants scheme will be suspended, possibly for a full financial year, and that is just after it has been reconstituted. Many points have been made about the depletion of housing stock in Scotland and the difficulties in repairing ageing housing stock. The voluntary improvement and repairs grants scheme must be fully operational this year.
I now refer to Newmilns, a small town in my district. The council wished to provide grants to upgrade certain buildings. Again it looks as though that will not happen and that there will be difficulties.
A decision should be taken on whether a grant can be made available to improve Ananhill house, a listed building. Again, the figure is £50,000. As I said, the prospect of any expansion in the care scheme looks remote.
I have two further items to mention in this brief speech. The Minister will recall that when he came to see Long Park co-op scheme he was particularly keen for it to go ahead. I visited the scheme only seven weeks ago. I was impressed by the manner in which that co-op had undertaken its job and improved the standard of the housing and thereby the living standards of the people of Long Park. It now seems that there are difficulties with Scottish Development Agency funding to infill some mines under part of the secondary scheme. I hope that the Minister can do something about that. I cordially invite him to open the scheme when it is completed. I enjoy opening schemes in Kilmarnock, but I am prepared to forgo that pleasure if the Minister can come up with the money and come back to Kilmarnock. I guarantee him safe conduct.
All Opposition Members are absolutely appalled at the antics of Scottish Homes. It has increased rents throughout Scotland on average by 14·2 per cent. There is absolutely no reason for it other than, as I suspect, that pressures have been applied by the Scottish Office for it to put pressure in turn on those who continue to be tenants to buy their homes. That would remove Scottish Homes' responsibility further to improve those homes. Opposition Members universally condemn the increase.
Kilmarnock has held a policy and resources meeting and decided once again to send the A team down to meet the Minister. We are always cordially received by the Minister but neither I nor the council want to go to the expense of sending the A team down to London to make pleas which are already extremely well documented and which the Minister can read. To save us that expense and time, I ask the Minister to read the correspondence between his Department and Kilmarnock. If he makes a just judgment on the figures, I believe that the additional £370,000 that we seek—it is not a great deal—will be dispatched to Kilmarnock tout de suite.

Mr. Calum Macdonald: The Minister was kind enough to dwell on the problems of Western Isles council, but he gave the wrong impression when he implied that it is somehow cushioned from the various cuts made not only this year but in previous years.
I appreciate that the Minister took time to meet a delegation from Western Isles council. Although no new money was put on the table, I felt that some progress, or potential progress, was made.

Lord James Douglas-Hamilton: The hon. Gentleman may not be aware that a supplementary allocation has been made to the Western Isles for this year. It is admittedly a small sum—£130,000. The allocation was made in response to that representation.

Mr. Macdonald: That is welcome news as far as it goes. The Minister said that Western Isles council was receiving the highest support grant this year. That may be true, but, of course, the Western Isles, like many other authorities in the highlands and islands, faces considerable exceptional costs in providing public housing. The hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) has already detailed some of those costs.

Mr. James Wallace: The hon. Gentleman shares with me the distinction of representing the single-tier islands authority. Has he had an opportunity to examine the Housing Support Grant (Scotland) Order 1991? The schedule to the order refers to Orkney Islands district council, Shetland Islands district council, Western Isles district council and Shetlands Islands district council. Is he aware that any such bodies exist?
Before we vote on this, perhaps you, Mr. Speaker, and your Clerk will consider whether the order is competent given that its schedule refers to bodies that do not exist.

Mr. Macdonald: The hon. Gentleman was kind enough to give me notice of that important point—I hope that it does not nullify certain aspects of that order.

Lord James Douglas-Hamilton: The hon. Gentleman's council will receive the highest subsidy as a result of the order, so I hope that it will be considered competent for his constituents' sake.

Mr. Macdonald: I do not want to rehearse the points already made by the hon. Member for Ross, Cromarty and Skye about the exceptional building costs in areas such as the Western Isles and the highlands and islands. Those regions face additional costs because materials must be imported—in the case of the Western Isles they are carried over the Minches. Councils also face additional costs for repair and maintenance because of climatic factors. The scattered nature of public housing means that it is difficult to get the economies of scale obtained elsewhere.
There is a particular problem facing the Western Isles. The council's experience of paying interest on its capital debt is different from the Scottish Office assessment of those repayments. My hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) has already said that a large part of the explanation for the exceptional capital debt faced by councils such as the Western Isles is the recent nature of that debt. On 31 March 1990 the total capital debt faced by the Western Isles was £111 million. In 1975, at the inception of the council, the debt was a mere £15 million—the debt has increased by some 640 per cent. The total comparable debt faced by all Scotish local authorities in 1975 was £2,965 million, but in 1990 it had risen to £7,982 million. The total Scottish debt has increased by 169 per cent. compared with the 640 per cent. debt increase faced by the Western Isles. That extra debt faced by the Western Isles is due to the higher number of consents granted by the Scottish Office under both Labour and Conservative Governments. When the Western Isles council was set up under the islands authority it had a great deal of leeway because it had to catch up on spending on various aspects of infrastructure, education and housing.
The average annual interest rate faced by authorities such as the Western Isles is now higher than the average faced by other local authorities because a greater


proportion of the debt is recent debt, which is more expensive than debt incurred before 1975. In years to come one of the key problems faced by the Western Isles and other local authorities will be the repayment of debt. I am grateful that, as a result of meetings, the Minister is willing to enter into discussions with COSLA to discuss that matter.
The Minister said that if the Government's estimate of the average interest rate faced by local authorities this year turned out to be an underestimate when the figures come in some clawback arrangement will be introduced and the Government will reassess their figures for the following year to make up the difference. That does not help local authorities to plug the gap this year.
That brings me to the key point, which is that the average interest rate does not take into account the different circumstances of local authorities. The difficulty is not only that the average interest rate may be higher this year than the Government estimate but that it will affect local authorities in different ways. I seek an assurance from the Minister that he will not only reassess next year the extent to which the estimate given by the Scottish Office has fallen behind the real average but re-examine the practicality of making special arrangements for authorities that face exceptionally high interest rates because of factors that are outside their control.

Mr. Jimmy Dunnachie: I want to draw the Minister's attention to certain areas in my constituency, starting with 1265 Pollokshaws road. In the past two years the Minister and I have become pen pals over it, but he still has not solved the problem. The complex consists of both district council housing and private housing built to a standard that has been rejected by the building societies which will not lend any money on it. The building leaks in the winter and is full of draughts in the summer. The windows and porches are full of dry rot. I have repeatedly asked the Minister to make an advance to ensure that the private owners in the complex have houses that are fit to live in. The Minister does his Pontius Pilate act and blames the district council. The council is blamed for a million things, including the fire of London and the black death. That is the only answer that we receive from the Scottish Office.
The Government continue to cut resources to Glasgow district council which, given the money, could make the residents' homes more suitable places in which to live. The district council renovated some of the homes under its control. The funny thing is that, even though the homes were renovated, people who took the Tory Government's advice and bought their homes now cannot sell them because the building societies will not lend any money to anyone who wants to buy them.
The Minister has said repeatedly over the past two years that that is not true. But the Halifax and the other building societies say, "Sorry. Too great a risk is involved in putting money into such buildings." I do not know how many times I have been to see the Minister. I am fed up with talking to him about the buildings. I have given him petitions and brought people to talk to him, but I have received no adequate response.
Perhaps as a result of pressure placed upon it the district council is engaged in a partial repair job. It is working on the windows and porches, but the roofs are left

unrepaired. The residents therefore suffer the indignity of using basins, pots, pans and pails to catch the water coming through the roof. For two years or more, your Government have done nothing to alleviate that suffering.
In Minard road, in the Shawlands area of Glasgow, a woman is living in a house with no roof. There are canvas covers where the roof should be. The district council cannot give her money because you will not advance it, despite the many complaints. You say that you have no money to give the district council, then you do your Pontius Pilate act and blame the council.

Mr. McKelvey: My hon. Friend is blaming Mr. Speaker. I am sure that he means the Minister.

Mr. Dunnachie: Sorry, Mr. Speaker.
Lack of grants is causing many problems for owner-occupiers in Pollok constituency and you and your party—sorry, Mr. Speaker—the Minister and his party have done nothing to alleviate the suffering of the people.
I could talk about Darnley; you know about Darnley, you have been there and you have seen the conditions in which people have to live. You have done nothing about that. In South Nitshill they have been waiting 30 years for modernisation; again, you have turned a blind eye. In central Pollok, again you have turned a deaf ear. In Kennishead there is the only multi-storey housing co-operative in Britain or Europe, and you have done nothing to help the people who are trying to help themselves. In God's name, will you do something to help the people of Pollok who are trying to make their houses fit to live in?

Mr. Jim Sillars: Mr. Speaker, you certainly took a drubbing in that speech. It is not my intention to hold you responsible any further. I want to direct my remarks to the person who is responsible. The Minister is following the wrong policy. Obviously Cabinet sub-committees have lost the argument about the amount of resources available for Scottish housing.
The fundamental flaw in Government policy is that they believe that tenure is the way to solve the Scottish housing problem. That was put rather well by David Comley, the director of housing for Glasgow city council, in a speech in February 1989 at the Scottish branch conference in Aviemore of the Institute of Housing. He said:
But, first, let's be clear what the fundamental problems of Scotland's housing are—poor quality, lack of investment, poverty".
There is a clear link between poor housing and economic activity, employment and wages. David Comley went on to give figures on two aspects of the problem:
The Grieve Report, commissioned by Glasgow District Council, called for
—the investment of £1,720m from all sectors in Glasgow's housing, including £550m for the peripheral estates.
—the write off of the city's housing capital debt, currently £1·25 billion, as a contribution to this.
There is no question about it: the people who benefit most from the housing problems in Glasgow are the moneylenders. We have only to consider the extent of the loan charges in the information before us to see the truth in that. David Comley also said:
The Government seems to be pre-occupied with tenure; it sees the low level of home ownership and of private renting as the basis of Scotland's and Glasgow's housing problem and a major contribution to economic problems. My view,


supported by the reports I have mentioned, is that lack of investment and the resulting condition of the housing stock, regardless of tenure, are the problems.
Those of us who represent constituencies in Glasgow know that there is 100 per cent. truth in what David Comley said almost two years ago.

Mr. Dunnachie: A good Labour man.

Mr. Sillars: I will not repeat that because it is not a sensible comment.
If we are seeking solutions to the housing problem, two things should happen in the forum where policy is made. First, the cry of despair of the people who have no homes, who are in overcrowded accommodation or who are badly housed—the people we meet in our surgeries—must be heard. It is not often that the hon. Member for Glasgow, Springburn (Mr. Martin) and I agree, but I should like to pay him a compliment because in his speech he certainly imported into this forum the human problems which all of us meet day after day.
Secondly, we need a response to this private cry of despair, but we are not getting one in the capital consents and the various other policies presented by the Government this evening. The Government tell us that the sale of council houses is part and parcel of their policy of generating capital to meet some of the problems explained here tonight. But COSLA tells us in annex 3 of its brief that it understood that receipts from the sale of council houses would be used from the beginning to augment the capital programme, not to substitute it, but that since the last election the amount of money available for capital expenditure has steadily diminished while council house receipts have risen.
I must tell the Minister and the hon. Member for Tayside, North (Mr. Walker) that the day of reckoning is coming in respect of council house sales. In Penilee, in my constituency, there is terraced housing, six in a block, in which three or four people have bought their houses. A pensioner couple decided that rents were becoming so high that, they might as well get a mortgage. Now they find themselves facing large repair and maintenance bills. They came to me for advice, and I said that I would see about a Government grant but that it could not be guaranteed. To be fair to the district council, it could not guarantee such a grant in the financial year in which the repairs were carried out.
Next, I advised the couple to go to the building society. The difference between what they paid for the house and its capital value now should have allowed an increase in the mortgage to meet this additional expenditure. But the old couple explained to me that that was impossible. They had bought the house in the first place because they lived on a relatively low income and could not afford the rent, so now it was impossible to afford the additional costs of a higher mortgage. So the fabric of this building in Penilee will continually deteriorate, and the same is happening in many other parts of the country.
These proposals, which show a substantial reduction in the resources allocated to Scottish housing, must be judged against the problems. It does not matter whether we use Government, Shelter, or district council statistics; we know that there has been a great increase in homelessness in all parts of Scotland. There is an enormous problem of

damp; 234,000 houses in Scotland suffer from it and it is a scourge for the families who have to live with it—80,000 of them in the city of Glasgow.
There is overcrowding and there are too many poor quality houses. I am sick and tired of hearing Conservative Members tell us about the alleged 20,000 empty council properties in Scotland. Would any of us live in those properties? The answer is, of course, no. There is also a lack of specialist housing—sheltered housing for the elderly, housing for the disabled and housing for young people, who are a vulnerable group. Matching the resources allocated to deal with the problem to the problem itself leads to only one conclusion—they are totally inadequate.
I should like to focus on the problems in my constituency. The area known as Corkerhill has a good community council and a good community leader in the shape of Walter Morrison. It is one of the best community councils in Glasgow, often regarded as a thorn in the flesh of the city council, which is what community councils are supposed to be. Corkerhill community council's public meetings are extremely well attended. Articulate and intelligent people gather to try to improve their circumstances. They live in an area of flat-roofed housing, and what they need more than anything else is pitched roofs. There is no money available for them. Now the district council finds it almost impossible to carry out repairs on the flat roofs because as the man walks across them to repair them he causes more damage. Tenants have problems with damp and their children have respiratory illnesses, all because of a lack of capital investment. It has nothing to do with tenure but everything to do with the amount of money available.
Moorpark is the area in Govan where the major drug dealing was done, but by a combination of community pressure and police action they got the major drug baron and the drug problem substantially out of the area. Nevertheless, it has high unemployment, there are many single-parent families, and there is a good deal of poverty. We went along to meet David Conley to argue our case for an improvement in housing because the folk there have no money of their own with which to generate improvement within the area, only to be told that because of the Government's policy there is no prospect of improvement in the current five-year programme and no guarantees for the next five-year programme. How do we stop that community slipping back into its former circumstances? It is, in the end, the Government's responsibility.
Only one conclusion can be drawn from an examination of the documents before the House about the human circumstances that we meet in the streets of Scotland: the Government are a failure, and the sooner they go, the better.

Mrs. Irene Adams: As a new Member, I am absolutely shocked to find that for two thirds of this debate only three or four hon. Members sat on the Government Benches. Is that what the Government of the country think about Scottish public sector housing? Is that the interest that they are willing to give to it, and can the party with the largest number of hon. Members find only three or four to attend the debate? It is utterly disgraceful.
One thing that I have learnt from the debate, however, is that people who live in cardboard boxes in Edinburgh


are overcrowded because they keep their skis in those boxes. We know that they do because they go to the constituency of the hon. Member for Tayside, North (Mr. Walker) at weekends to ski. He told us this. He also told us that they come to pick berries and that they will not go away. Maybe we shall have to consider issuing visas for Tayside to make sure that they do not stay in his constituency. Does the hon. Member never ask himself why people move around like that? If they were settled in a decent home—

Mr. Bill Walker: I am delighted to tell the hon. Lady why people come to my constituency: it is because it is such a beautiful place. If some come there to ski, it is not surprising.
Perhaps I should remind the hon. Lady that, although Conservative Members from Scotland have attended the debate, a lot of Labour Members from Scotland have not put in an appearance at all.

Mrs. Adams: I visit the hon. Member's constituency, but I do not go to pick berries and I do not have to look for a job or a home there. The difference between Opposition Members and Government Members is that we want everyone to live in decent homes, not just some of the people.
Homelessness in Scotland has risen dramatically under this Government. The present situation is almost comparable with that of 100 years ago, with nearly as many homeless people in this country today as there were then. It is a disgraceful indictment of any Government.
Homelessness affects one's whole way of life. It is not just that a person has no roof over his head or is living under someone else's roof. People may be inadequately housed. In Renfrew district, for example, there are 25,000 people on the waiting list. I am not suggesting that they are all homeless, but they are all inadequately housed. Inadequate housing affects people's lifestyles. Children are not educated properly because often there is no extra room in which they can study. Renfrew has massive overcrowding because it does not have the houses to which to move people. The best will and all the management in the world will not solve that problem. Resources are required.
Conservative Members tell us again and again that the problems are caused by mismanagement and that if we tinker here and there many of them can be solved. They are suggesting a redistribution of poverty, which is the basic reason for our housing problems. That poverty is a result of the Government's economic policy. People who do not have jobs lose their houses and have nowhere to go. The Government have deliberately set about destroying public sector housing. Scotland was an egalitarian society in which most people lived in public sector houses, but the Government told them that that was not a good idea and, as a result, the best public sector housing has been sold. The Government have not made available resources to replace those houses and have not given us the receipts from sales to reinvest in the houses that are left. As a result, those houses have continuously deteriorated.
Conservative Members have spoken about empty council houses. A shell without a roof is not an empty house, it is an empty shell. Of course people will not accept such houses. I certainly would not and I defy any Conservative Member to say that he would. The people who are offered such houses are often those who do not

have any resources to spend on them. They are single parents and people on fixed incomes. Some of the homelessness among such people has arisen because benefits are no longer available to some young people. Some households totally depend on state benefits and a young person of 17 who has no training, no job and no income cannot remain in such a household because his family cannot afford to keep him. The only way that he can become entitled to income is to go on to the streets and become homeless. His name will then be placed on the homeless list and he will be allocated a house and be entitled to benefit. The vicious circle continues.
Government policies have caused poverty, and that has created the homelessness which has destroyed Scotland's public sector housing. If the Government can offer no better answer than a massive reduction in the allocation of money, it is time that they moved over and moved off the park.

Mr. Thomas Graham: The last time that the Minister was in my constituency he was seen on a penny-farthing bike. At least that bike worked. The miserable pittance that the Minister has offered to solve some of Scotland's housing problems will lead to him being called the Minister of rent-a-tent. The Minister's predecessors over the past 10 years have been weak-willed wafflers.
Scotland's housing crisis breaks my heart, and I am sure that it breaks the heart of many hon. Members who receive letters on the subject. I should like to read one which speaks clearly about the problem being created by the Government. It states:
Dear Mr. Graham,
I am desperately in need of your help. Due to a combination of low-paid work and high interest rates I have been forced to sell my house. After getting into difficulties with the payments I tried to catch up with my arrears, but this eventually became impossible and the building society advised me to sell before they took action themselves, this has left both my wife and I at our wits end— in fact my wife is on medication from her doctor.
In order to try to save our home my wife secured a part-time job in Linwood. However, if we were forced to leave Linwood she would have to give this job up because the hours fit in with my children's school hours.
The local authority has been nearly broken by the Government's mismanagement in failing to house people in such circumstances.
I have another letter which I am sure will break the hearts of many hon. Members on this side of the House. I hope that the Government will take some action because they have the power to do so. This is a letter from a sergeant in the Army for whom I have tried to secure a house. After 24 years in the Army, having given excellent service, he wishes to come to my area. He wants to stay with his family, with his mother and brother, and with people in the community. We cannot give him a house. The local authority has only a few left and there is not a big turnover in housing. But we have Scottish Homes, over which the Minister has absolute control. Did Scottish Homes respond to this man's need? No, it did not. The Under-Secretary of State should get the rules and regulations changed to allow this man to be housed by Scottish Homes or to allow the man even to purchase a Scottish home. The Government have denied him that right, too. The Minister should hang his head in shame if he cannot help a loyal service man with 24 years' service.
I have another letter to which I wish to draw attention although I shall not read it to the House. It is from an invalid, a woman suffering very serious health problems. She lives in another part of the country and wishes to come to our area. She has tried everything, but has been unsuccessful because the council does not have all the houses in its control. Our area is very much dominated by the houses owned by Scottish Homes. As hon. Members will know, Scottish Homes has become the biggest estate agency in Scotland. It does not contribute at all to solving the problem of homelessness or to assisting the people of Renfrewshire who wish to stay in the area.
I also instance in this debate the massive escalation in rents in my constituency. I believe that the Government are perpetrating mindless mugging. One has only to consider the escalating poll tax, increasing fuel costs, and the ongoing problem of homelessness, all of which have been created by this Government because of the economic position that they have taken in past years involving high interest rates. We know that factories in our area are closing practically every day of the week, yet the Government still continue their mad housing policy.
All hon. Members could quote cases such as I have instanced tonight. Scottish Office Ministers should argue the case, in Cabinet or wherever, to obtain sufficient money to build new houses. We desperately need new houses in Scotland. We also need money to renovate damp houses—houses in which people cannot live because the Government have constantly curbed funds for local government which wishes to improve such houses. I put it to the Minister that we also need sheltered housing accommodation. We need supported accommodation for some of the people whom this Government have thrown on the street. I refer to the mentally handicapped and mentally ill who are walking the streets in my area, in Glasgow and in other cities. The Minister has a duty and a responsibility to fight for the people of Scotland. There is a crisis and we need housing. Perhaps the Minister needs a pair of glasses. I shall give him some and then take him to see the problem.
It has been said tonight that the berry pickers are looking for houses. There are more than just berry pickers looking for houses—loyal service men will come home having fought a war for this country, and they will expect homes fit to live in.

Mr. Gordon McMaster:: As a new Member, this is my first opportunity to participate in a Scottish housing debate. I read the orders carefully, and nowhere do they refer to tenants, those who depend on public sector housing. There are statistics—columns and columns of numbers—but there is nothing about those who depend on public sector housing.
The hon. Member for Glasgow, Govan (Mr. Sillars) referred to the link between bad housing and bad health. I am sorry that the hon. and learned Member for Perth and Kinross (Sir N. Fairbairn) has left the Chamber. He referred to the past, when councils ripped people away from the hearts of the cities. I had the pleasure today of welcoming my father as a visitor to the House. He was brought up in the constituency that I represent, in the town of Johnstone. His experience was of 100 people—24

families— sharing four outside toilets. Those are the sort of conditions that people were ripped away from in the hearts of the cities. Perhaps someone in the position of the hon. and learned Gentleman can afford that sort of nostalgia, but it is not something to which the people of Scotland want to return. It put my father in a sanatorium, and it is now endangering young children who suffer from asthma and bronchial complaints. That is the reality of Scottish housing and the lack of proper investment.
I am glad that my hon. Friends have tried to concentrate the debate on the fundamental right to shelter. They have concentrated on homes rather than dwelling units and put people before statistics. Some hon. Members have accused the Minister of indifference to the problems of Scottish housing. It is far worse than indifference. During the past decade, there has been the systematic and calculated destruction of a public sector housing system that has taken a century to build. The Government have tried to destroy it in a decade. Hon. Members have referred to the excellent briefing paper prepared by COSLA. Whatever is said, we cannot disguise the fact that during that decade £1,500 million of direct Government support has been taken away from Scottish local government and it cannot be denied that £100 million more is being taken away this year.
In my maiden speech on 12 December 1989, I said that if the housing support grant for Renfrew district council was restored to its 1979 level, when the Government took office, it would be 34 per cent.—another £11 million for the council. That money would not only improve housing and reduce homelessness, but it would help the local economy because that council expenditure would generate local jobs. That would improve the economic position of the whole area.
During the decade that the Government have had responsibility for Scottish housing, council house tenants have become the most heavily taxed people. Housing support grant has been lost, as has the general fund contribution, yet that is the part that society, the community as a whole, puts into public sector housing. Interest rates and inflation have risen, and that has also had an impact on local authority budgets. I believe that there is something more sinister. What has happened? In the last decade the best public sector houses have been sold leaving the worst and fewer tenants to finance them. That is the reality.
The Government have offered a carrot-and-stick solution: they have offered the carrot of discounts to those people wishing to purchase public sector houses, but they have stood behind them with a stick hitting them to ensure that we do not invest in public sector housing. If a person does not like the conditions in which he is living, if he wishes to improve his lot, and if he wants a wind and watertight house, he will need to purchase that house. That is what has happened to many people.
In conclusion, I draw attention to the plight of many young couples who, because of the problems facing Scottish housing, have been unable to obtain a public sector house. This has often forced them to enter into mortgages which they cannot afford. One of the sad housing statistics is that of the number of young people who are having their homes repossessed because they can no longer keep up the mortgage payments. This is one of the problems affecting constituencies such as mine. I invite the Minister to come, for example, to the Foxbar area where almost half the houses are uninhabitable and where


people who are living there are living in damp, deplorable conditions. These people had plenty of promises and statements in the Paisley, South by-election campaign, but they do not want sympathetic noises; they want action. The Government should give it to them.

Mr. Alistair Darling: Understandably, at present people's minds are elsewhere, but it is business as usual for many people in this country. It is business as usual for the homeless young people who are sleeping in cardboard city on the Embankment, not far from this place; it is business as usual for homeless people in Edinburgh, the capital city of Scotland.
A few minutes ago my hon. Friend the Member for Paisley, North (Mrs. Adams) made a light-hearted and humorous comment about Edinburgh. I think that some people forget that, although Edinburgh is without doubt one of the most prosperous cities in Europe, at the same time it has formidable problems, particularly in housing. Just before Christmas a great deal of attention was focused on the plight of homeless people in Edinburgh. On the same day that the Prime Minister announced extra money for the homeless in London I asked the Scottish Office what it intended to do for Scotland. The answer was "nothing". Yet within a few hours the Scottish Office had cobbled together an announcement that £2 million had been allocated to Scotland.
We found out what that £2 million was. It was not additional money being made available to Scotland; it was simply borrowing consent for the four major cities of Scotland. For every penny those cities borrow, the interest has to be paid, not by the taxpayers as a whole, but by council house tenants. Therefore, existing council house tenants in Edinburgh, Glasgow, Dundee and Aberdeen will have to shoulder the burden of providing what little extra help there is for homeless people. Of the £2 million being made available, Edinburgh has put in for £1 million. Perhaps that is ambitious, because it is half the programme. If the city gets that £1 million it will provide just 16 beds—16 beds in a city with more than 6,000 homeless people. Half of those 6,000 are in priority need. It is estimated—and it can only be an estimate—that 200 people in Edinburgh sleep rough every night, in graveyards, in the streets, anywhere they can find, every night of the year. There has been a 200 per cent. increase in the homeless rate for 16 to 24-year-olds, young people who are increasingly at risk from violence and sexual abuse. Many of them turn to prostitution, male and female. It is one of the scars of Scotland that in Edinburgh, which is one of the most prosperous cities in Europe, there is this ugly side to the city of people who are in desperate need. The Government are not willing to face the real problem.
The Minister will say that there are empty houses in Edinburgh. Yes, there are. Edinburgh district council is doing all it can to speed up its allocation policies. But there are other problems. Some houses need repair before they can be let and, as other hon. Members have said, people understandably will not take houses that are not fit for reletting.
Another problem is that now that there is no single payment from the Department of Social Security people who are offered houses might not be able to furnish them. Community care grants are being limited and cut in

Edinburgh as in other areas. Yet until this year Edinburgh received no housing support grant. This year it received a mere £500,000.
In addition to that problem, the record of Scottish Homes in Edinburgh is abysmal. Edinburgh has 26 per cent. public sector housing, but this year it received only £10·1 million from Scottish Homes, £9 million of which was for committed projects, so only £1 million was available in new money. Yet Glasgow, which has 60 per cent. public sector housing and a population only twice that of Edinburgh, had five times the amount that Edinburgh had from public funds.
I do not grudge Glasgow a single penny of that, but why on earth should Edinburgh lose out so badly? The Government say that that is nothing to do with them and that it is a matter for the quango that they appointed—Scottish Homes. But the lack of public sector rented accommodation means that pensioners who want to live in sheltered housing and in the centre of the city, rather than be shifted out to the schemes in the periphery, cannot do so, young couples who could never afford to buy have no accommodation to choose from, and a growing number of single people have nowhere to go at all.
The Government's policy is all over the place. It is clear that they want to reduce the number of people who live in public sector housing, but when will they face up to the fact that, even if they reduce the number of people in public sector housing, a large core of people will still have no choice other than to rely on public sector housing? They include pensioners and young people who do not have the spending power to buy their own houses.
What will happen to that large core of people for whom buying a house is simply not an option? The Government do not seem to have an answer. Certainly the chairman of Scottish Homes does not have an answer. He refers to something called social housing, as one might expect from a retired diplomat. He has no idea of the problems facing the people in Scotland, and in Edinburgh in particular.
Too often people look at Edinburgh—at Princes street, the castle and the Georgian new town—and they think that it is a prosperous city. Some of it is, but behind those Georgian facades and beside some of those magnificent buildings that are the envy of many tourists who visit Edinburgh there is much hardship and grief. That may give rise to laughter among Scottish Office Ministers, but the time has come when the Scottish Office should stop acting as simply a branch office of the Department of the Environment and realise that the urgent and ugly problems in Edinburgh need to be tackled now.

Mr. David Lambie: I have little time left, so I shall make only two important points.
Every hon. Member who has spoken tonight has pointed out the serious housing problem facing Scotland. More than 90 per cent. of those people who contact us at our surgeries, whether of a Labour or a Conservative Member of Parliament, have housing problems. Yet, as councillors keep telling us, we as Members of Parliament have nothing to do with housing. Such is the crisis that the Scottish people are facing that, as a last resort, they have to go to their Members of Parliament.
The orders are another attempt by the Government to hammer public sector housing and council tenants. During the past 10 years in Scotland public sector housing finance


has dropped by £1·5 billion. I would accept that if the Government were trying to reduce the amount of money given to housing in the United Kingdom budget, but they are not doing that. During the past 10 years, when they have hammered council houses and taken away £1 x00B7;5 billion in resources for council houses, they have increased tenfold the amount of money being given to the owner-occupier and the private sector. At the same time they have increased substantially the amount given to owner-occupiers.
The hon. Member for Tayside, North (Mr. Walker) said that mortgage tax relief was not really a subsidy. I remind the hon. Gentleman and all his Tory colleagues that the Adam Smith Institute—the think tank of the Tory party—said that the party and the Government had no right to subsidise owner-occupiers. In fact, a recent Chancellor considered doing away with mortgage tax relief. Why do not the Tories carry out Tory party policy in the case of owner-occupiers? They do so in the case of council tenants. Let us have an even playing field, rather than continual attacks on council tenants.
Lastly, I want to raise a problem from my constituency. The biggest part of the constituency is the new town of Irvine, where there is a tremendous housing problem. The Government have brought people into the new town. Those people have been provided with jobs, and good amenities, including very modern houses. But the urban development corporation is not being provided with money to supply houses for second-generation families. I want the Minister to ask his colleague who is responsible for new towns to look into the problem and see that money is provided for this purpose.
On a previous occasion I requested a meeting with the Minister to discuss the problem. That was after his refusal and the refusal of his officials to meet representatives of Cunninghame district council. In a communication to the council the Minister said that the development corporation was not to be given any money to provide houses for second-generation families, as that was the job of the council. Again, under these orders, he has the cheek to give Cunninghame district council not one penny towards housing support grant—not a penny for houses for second-generation families.
The Minister is quite a decent chap. Let him ensure that Cunninghame district council is given the money to provide houses for second-generation families in Irvine new town.

Lord James Douglas-Hamilton: This has been a very useful and varied debate. I shall look into the point that the hon. Member for Cunninghame, South (Mr. Lambie) made. Some time ago, in a similar debate, he mentioned the Adam Smith Institute's recommendation that there should be a rents-to-mortgages scheme—something for which the hon. Gentleman has called. We are doing precisely that—aiming for a wholly new market. The recommendation will be followed through in due course, and I shall be meeting the housing committee of the Convention of Scottish Local Authorities to discuss the subject.

Mr. Lambie: That is not what I called for. I called for the abolition of mortgage tax relief, which is Tory party policy as recommended by the Adam Smith Institute.

Lord James Douglas-Hamilton: The hon. Gentleman has made that point twice in our debates, once in the Scottish Grand Committee and once on the Floor of the House when he addressed my right hon. and learned Friend the previous Secretary of State for Scotland. He may have made the point as a joke, but he made it very effectively and we are acting on it.
In response to the hon. Members for Renfrew, West and Inverclyde (Mr. Graham), for Paisley, North (Mrs. Adams) and for Paisley, South (Mr. McMaster), I must point out that the HRA provisional allocation for Renfrew district council amounts to more than £17 million, which represents £535 per council house. That is an increase over the provision for 1990–91 of £528 per house. We are taking the urban partnership initiative very seriously and we have already made available £1·257 million extra for innovative housing.
The hon. Member for Glasgow, Pollok (Mr. Dunnachie) referred to 1265 Pollokshaws road. Glasgow district council recently stated that it is willing to make grants available for improvements to those properties. I hope that that will be of considerable assistance to the hon. Gentleman's constituents. However, the hon. Gentleman should not underestimate the significance of the assistance that Glasgow district council can provide.
The hon. Member for Glasgow, Springburn (Mr. Martin) referred to someone buying a flat in a council house block of four and asked whether that person would be eligible for an improvement grant. That may be at the discretion of the local authority depending, on how recently the house was—[Interruption.]
I want now to consider the funding for Glasgow to which reference was made by the hon. Members for Springburn, for Pollok and for Glasgow, Govan (Mr. Sillars). As the largest housing authority in Scotland, Glasgow continues to receive the largest share of resources available—more than 20 per cent. of the provision. For 1991–92 the council's HRA allocation of £92 million includes £4·6 million to honour commitments given for innovative housing in Castlemilk in Cathcart. Excluding that earmarked provision, the allocation gives the council an allocation of £616 per council house which is considerably above the Scottish average of £559. The council's net allocation of £60 million is 11 per cent. higher than the corresponding allocation for 1990–91. That increase, together with the resources of around £16 million which the council expects to draw down from its covenant scheme, should enable it to sustain its substantial capital programme. With regard to non-HRA moneys, the allocation of £23 million should support activity.

Mr. Dunnachie: What?

Lord James Douglas-Hamilton: The hon. Gentleman should not belittle that £23 million and the point that he made about his constituents could be covered there.
Glasgow does particularly well with regard to housing support grant. It received more than £22 million, which is more than 40 per cent. of the total payable in Scotland, while Glasgow has less than 20 per cent. of the council housing stock.
We would not have guessed from the debate that Edinburgh had just received an allocation of more than £8


million to deal with the pre-1984 tenement block applications. That sum should finish the exercise and that fact should be acknowledged.

Mr. Maxton: Following the Minister's remarks about housing support grant for Glasgow, will he make it clear that he is cutting Glasgow's housing support grant by very nearly £2 million?

Lord James Douglas-Hamilton: The hon. Gentleman must take account of what I said about interest rates, which have an effect on the total sum. I appreciate that Glasgow's rents have increased significantly in recent years and, although I accept that part of that increase is attributable to reductions in general fund contributions, the major reason is that the council chose to enter into large covenant agreements. It knew before doing so that those agreements were not eligible for housing support grant. However, Edinburgh has a considerably higher allocation than the Scottish average of £559. It receives £685 per house, and the public sector contribution in Edinburgh's capital programme will rise from more than £6 million to £12 million in 1991–92, a substantial increase of more than 112 per cent. It is remarkable that Edinburgh has a £2 million surplus on its revenue account which it could use if it wished. That, of course, is a matter for Edinburgh. No doubt the hon. Member for Edinburgh, Central (Mr. Darling) will know why it has not been used.

Mr. Darling: As it happens, I raised that very point with some senior officials from Edinburgh district council, and the Minister knows the answer. Does he accept that the £8 million ceiling that has been allocated for the housing repair grant scheme deals only with pre-1984 applications and that several thousand people are still waiting for allocations after that time? Will the Minister also consider my point about Scottish Homes? Why is it that Glasgow, with twice the population of Edinburgh, gets five times as much as Edinburgh does for the traditional rented sector in the housing association programme?

Lord James Douglas-Hamilton: Glasgow gets a larger share because needs in Glasgow are greater than those in Edinburgh. No fair-minded Scottish Member of Parliament would deny that. Edinburgh has problems, and rooflessness, which is not the same as homelessness, is a particular one. I take seriously the representations that have been made. There is no simple solution. The programmes that are being put forward will be carefully considered. We hope to respond as soon as possible. We are making a non-housing revenue account allocation of more than £18 million to Edinburgh, so it is doing very well.

Mrs. Fyfe: I address my remarks to my colleagues. Are we not sick of statistics being bandied year after year? Ministers attempt to deceive the public by talking of vast amounts of capital allocation which we know have already been spent. They do not talk about the real figures that matter. How long must people languish in houses that are totally unfit to live in? [Interruption.] We want to know for how long our constituents will have to live in deplorable housing conditions. We have had the tenants' campaign—[Interruption.]

Lord James Douglas-Hamilton: I have visited the hon. Lady's constituency several times. Progress is being made, not least by Queens Cross housing association, which is

effectively in her constituency. Scottish Homes, through the housing associations and the housing association movement before Scottish Homes was set up, spent nearly £0·5 billion in Glasgow.
The hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) made an important point about the pool rate of interest used in the housing support grant calculations. If the hon. Gentleman cares to examine the record of previous years, he will note that the pool rate has proved to be a reasonably accurate guide to the interest payable by each authority. I know of no reason why the pool rate should suddenly be regarded as inaccurate. However, as I said earlier, I should be happy for the use of the pool rate to be discussed further with the convention. I mentioned also that the authorities in the highlands and islands a re major beneficiaries of housing support grant. Next year, Ross and Cromarty will receive a subsidy of more than £700 per council tenant. Inverness receives £267 per tenant and Lochaber receives £977 per tenant. On average in Scotland, the subsidy amounts to only £76 per tenant. Those areas in the highlands are doing better than the Scottish average, which is only fair when all circumstances are taken into account.
We have made a supplementary allocation today to Ettrick and Lauderdale, to Roxburgh, Stirling, Kincardine and Deeside, to Western Isles and to Hamilton of £825,000. Of course, final allocations remain to be paid. We shall take into account the points that have been made.
On capital investment in relation to resources generally for Scotland, under the Labour Government there was a reduction in real terms of 36 per cent. However, there has been an increase in real terms of 13 per cent. since 1978–79. Indeed, the provisional housing capital allocation fell by £520 million.
The Government have a good record. Through Scottish Homes we have created a powerful housing development agency funded with more than £1,140 million. Since we came to power we have done a great deal to increase the number of amenity dwellings. The number has more than quadrupled. We have increased the number of sheltered dwellings to over 28,600. We have responded to the aspirations of the Scottish people by introducing not only the right to buy but soon the rents-to-mortgages scheme which will be accessible to 370,000 tenants—even if the hon. Member for Cunninghame, South (Mr. Lambie) regrets that he asked for the scheme some years ago. I shall be happy to remind him of what he said in Hansard.
We have demonstrated our determination to provide the resources and guidance needed to enable local authorities to deal efficiently and sensitively with the difficult problem of homelessness. It is often forgotten that since 1979 some 220,000 houses have been built in Scotland. Virtually 60,000 of those were built by the public sector and housing associations.

Mr. Maxton: Will the Minister give way?

Lord James Douglas-Hamilton: I have only one minute to go.
The orders provide a fair and reasonable subsidy package for 1991–92 and I am glad to recommend that the House approve them.

Question put:—

The House divided: Ayes 218, Noes 150.

Division No. 46]
[10.46 pm


AYES


Aitken, Jonathan
Hargreaves, A. (B'ham H'll Gr')


Alexander, Richard
Hargreaves, Ken (Hyndburn)


Alison, Rt Hon Michael
Harris, David


Allason, Rupert
Haselhurst, Alan


Amess, David
Hawkins, Christopher


Amos, Alan
Hayes, Jerry


Arbuthnot, James
Hayhoe, Rt Hon Sir Barney


Arnold, Jacques (Gravesham)
Hayward, Robert


Aspinwall, Jack
Hicks, Mrs Maureen (Wolv' NE)


Baker, Rt Hon K. (Mole Valley)
Hicks, Robert (Cornwall SE)


Baker, Nicholas (Dorset N)
Hill, James


Beggs, Roy
Hind, Kenneth


Bellingham, Henry
Howarth, G. (Cannock &amp; B'wd)


Bennett, Nicholas (Pembroke)
Howell, Ralph (North Norfolk)


Bevan, David Gilroy
Hughes, Robert G. (Harrow W)


Boscawen, Hon Robert
Hunt, David (Wirral W)


Boswell, Tim
Hunter, Andrew


Bottomley, Peter
Irvine, Michael


Bottomley, Mrs Virginia
Jack, Michael


Bowden, A (Brighton K'pto'n)
Janman, Tim


Bowden, Gerald (Dulwich)
Jessel, Toby


Bowis, John
Johnson Smith, Sir Geoffrey


Brazier, Julian
Jones, Gwilym (Cardiff N)


Bright, Graham
Jones, Robert B (Herts W)


Brown, Michael (Brlgg &amp; Cl't's)
Kilfedder, James


Bruce, Ian (Dorset South)
King, Roger (B'ham N'thfield)


Buchanan-Smith, Rt Hon Alick
Knapman, Roger


Budgen, Nicholas
Knight, Greg (Derby North)


Burns, Simon
Knight, Dame Jill (Edgbaston)


Burt, Alistair
Knowles, Michael


Butler, Chris
Knox, David


Carlisle, John, (Luton N)
Lang, Ian


Carlisle, Kenneth (Lincoln)
Lawrence, Ivan


Carrington, Matthew
Lee, John (Pendle)


Carttiss, Michael
Lennox-Boyd, Hon Mark


Channon, Rt Hon Paul
Lester, Jim (Broxtowe)


Chapman, Sydney
Lilley, Peter


Chope, Christopher
Lloyd, Peter (Fareham)


Clark, Rt Hon Alan (Plymouth)
Lord, Michael


Clarke, Rt Hon K. (Rushcliffe)
Luce, Rt Hon Sir Richard


Colvin, Michael
Lyell, Rt Hon Sir Nicholas


Coombs, Anthony (Wyre F'rest)
Macfarlane, Sir Neil


Coombs, Simon (Swindon)
MacKay, Andrew (E Berkshire)


Cope, Rt Hon John
Maclean, David


Couchman, James
McLoughlin, Patrick


Cran, James
Madel, David


Curry, David
Malins, Humfrey


Davies, Q. (Stamf'd &amp; Spald'g)
Mans, Keith


Davis, David (Boothferry)
Maples, John


Day, Stephen
Marland, Paul


Dicks, Terry
Martin, David (Portsmouth S)


Douglas-Hamilton, Lord James
Mates, Michael


Dover, Den
Mawhinney, Dr Brian


Dunn, Bob
Maxwell-Hyslop, Robin


Durant, Sir Anthony
Mayhew, Rt Hon Sir Patrick


Dykes, Hugh
Meyer, Sir Anthony


Emery, Sir Peter
Miller, Sir Hal


Fairbairn, Sir Nicholas
Mills, Iain


Favell, Tony
Mitchell, Andrew (Gedling)


Fenner, Dame Peggy
Mitchell, Sir David


Forman, Nigel
Moate, Roger


Forsyth, Michael (Stirling)
Monro, Sir Hector


Forsythe, Clifford (Antrim S)
Montgomery, Sir Fergus


Fowler, Rt Hon Sir Norman
Morris, M (N'hampton S)


Fox, Sir Marcus
Morrison, Sir Charles


French, Douglas
Morrison, Rt Hon Sir Peter


Garel-Jones, Tristan
Moss, Malcolm


Gill, Christopher
Neale, Sir Gerrard


Goodhart, Sir Philip
Nelson, Anthony


Goodlad, Alastair
Neubert, Sir Michael


Gorman, Mrs Teresa
Nicholson, David (Taunton)


Gregory, Conal
Norris, Steve


Gummer, Rt Hon John Selwyn
Onslow, Rt Hon Cranley


Hamilton, Hon Archie (Epsom)
Oppenheim, Phillip


Hamilton, Neil (Tatton)
Page, Richard


Hampson, Dr Keith
Paice, James


Hannam, John
Peacock, Mrs Elizabeth





Porter, Barry (Wirral S)
Summerson, Hugo


Porter, David (Waveney)
Taylor, Ian (Esher)


Powell, William (Corby)
Taylor, John M (Solihull)


Price, Sir David
Tebbit, Rt Hon Norman


Raison, Rt Hon Sir Timothy
Temple-Morris, Peter


Redwood, John
Thompson, D. (Calder Valley)


Rhodes James, Robert
Thompson, Patrick (Norwich N)


Ridsdale, Sir Julian
Thorne, Neil


Roberts, Sir Wyn (Conwy)
Thornton, Malcolm


Ross, William (Londonderry E)
Thurnham, Peter


Rowe, Andrew
Tredinnick, David


Ryder, Richard
Trotter, Neville


Sackville, Hon Tom
Twinn, Dr Ian


Sayeed, Jonathan
Walden, George


Shaw, David (Dover)
Walker, Bill (T'side North)


Shaw, Sir Giles (Pudsey)
Waller, Gary


Shelton, Sir William
Ward, John


Shephard, Mrs G. (Norfolk SW)
Wardle, Charles (Bexhill)


Shepherd, Colin (Hereford)
Warren, Kenneth


Sims, Roger
Watts, John


Skeet, Sir Trevor
Wells, Bowen


Smith, Tim (Beaconsfield)
Wheeler, Sir John


Speed, Keith
Whitney, Ray


Speller, Tony
Widdecombe, Ann


Spicer, Sir Jim (Dorset W)
Wilkinson, John


Spicer, Michael (S Worcs)
Wilshire, David


Stanbrook, Ivor
Winterton, Mrs Ann


Stanley, Rt Hon Sir John
Winterton, Nicholas


Steen, Anthony
Wood, Timothy


Stern, Michael
Young, Sir George (Acton)


Stevens, Lewis



Stewart, Allan (Eastwood)
Tellers for the Ayes:


Stewart, Andy (Sherwood)
Mr. Irvine Patrick and


Stokes, Sir John
Mr. Timothy Kirkhope.


NOES


Abbott, Ms Diane
Flynn, Paul


Adams, Mrs. Irene (Paisley, N.)
Foster, Derek


Allen, Graham
Foulkes, George


Archer, Rt Hon Peter
Fyfe, Maria


Ashdown, Rt Hon Paddy
George, Bruce


Barnes, Harry (Derbyshire NE)
Godman, Dr Norman A.


Battle, John
Golding, Mrs Llin


Beckett, Margaret
Gordon, Mildred


Beith, A. J.
Graham, Thomas


Bellotti, David
Grant, Bernie (Tottenham)


Benton, Joseph
Griffiths, Nigel (Edinburgh S)


Boyes, Roland
Griffiths, Win (Bridgend)


Bradley, Keith
Grocott, Bruce


Bray, Dr Jeremy
Harman, Ms Harriet


Brown, Gordon (D'mline E)
Haynes, Frank


Brown, Nicholas (Newcastle E)
Heal, Mrs Sylvia


Brown, Ron (Edinburgh Leith)
Hinchliffe, David


Bruce, Malcolm (Gordon)
Hoey, Ms Kate (Vauxhall)


Buckley, George J.
Hogg, N. (C'nauld &amp; Kilsyth)


Caborn, Richard
Home Robertson, John


Campbell, Menzies (Fife NE)
Hood, Jimmy


Campbell-Savours, D. N.
Howarth, George (Knowsley N)


Canavan, Dennis
Howells, Geraint


Carlile, Alex (Mont'g)
Howells, Dr. Kim (Pontypridd)


Clarke, Tom (Monklands W)
Hoyle, Doug


Clwyd, Mrs Ann
Hughes, John (Coventry NE)


Cook, Robin (Livingston)
Hughes, Robert (Aberdeen N)


Corbyn, Jeremy
Hughes, Simon (Southwark)


Crowther, Stan
Ingram, Adam


Cryer, Bob
Jones, Barry (Alyn &amp; Deeside)


Cunliffe, Lawrence
Jones, Martyn (Clwyd S W)


Darling, Alistair
Kennedy, Charles


Davis, Terry (B'ham Hodge H'I)
Kirkwood, Archy


Dewar, Donald
Lambie, David


Dixon, Don
Lamond, James


Doran, Frank
Leadbitter, Ted


Douglas, Dick
Leighton, Ron


Dunnachie, Jimmy
Lestor, Joan (Eccles)


Eadie, Alexander
Livsey, Richard


Eastham, Ken
Loyden, Eddie


Evans, John (St Helens N)
McAllion, John


Ewing, Harry (Falkirk E)
McCartney, Ian


Fearn, Ronald
Macdonald, Calum A.


Fisher, Mark
McFall, John






McKay, Allen (Barnsley West)
Rooker, Jeff


McKelvey, William
Rooney, Terence


McLeish, Henry
Ross, Ernie (Dundee W)


McMaster, Gordon
Ruddock, Joan


McWilliam, John
Short, Clare


Madden, Max
Sillars, Jim


Mahon, Mrs Alice
Skinner, Dennis


Marshall, David (Shettleston)
Smith, C. (Isl'ton &amp; F'bury)


Martin, Michael J. (Springburn)
Spearing, Nigel


Martlew, Eric
Steel, Rt Hon Sir David


Maxton, John
Steinberg, Gerry


Meale, Alan
Strang, Gavin


Michael, Alun
Taylor, Mrs Ann (Dewsbury)


Michie, Bill (Sheffield Heeley)
Taylor, Matthew (Truro)


Michie, Mrs Ray (Arg'l &amp; Bute)
Turner, Dennis


Moonie, Dr Lewis
Vaz, Keith


Morgan, Rhodri
Wallace, James


Morley, Elliot
Wardell, Gareth (Gower)


Murphy, Paul
Wareing, Robert N.


Nellist, Dave
Watson, Mike (Glasgow, C)


O'Hara, Edward
Welsh, Andrew (Angus E)


O'Neill, Martin
Welsh, Michael (Doncaster N)


Parry, Robert
Williams, Alan W. (Carm'then)


Patchett, Terry
Wilson, Brian


Pike, Peter L.
Winnick, David


Powell, Ray (Ogmore)
Wise, Mrs Audrey


Prescott, John
Worthington, Tony


Primarolo, Dawn
Wray, Jimmy


Quin, Ms Joyce
Young, David (Bolton SE)


Redmond, Martin



Reid, Dr John
Tellers for the Noes:


Richardson, Jo
Mr. Jack Thompson and


Robertson, George
Mr. Thomas McAvoy.

Question accordingly agreed to.

Resolved,
That the draft Housing Support Grant (Scotland) Order 1991, which was laid before this House on 17th December, be approved.
It being more than three hours after the commencement of proceedings on the previous motion, Mr. Deputy Speaker proceeded, pursuant to Order [18 January], to put forthwith the Question necessary to dispose of proceedings on the other motion in the name of Mr. Secretary Lang.

Resolved,
That the draft Housing Support Grant (Scotland) Variation Order 1991, which was laid before this House on 17th December, be approved.—[Lord James Douglas-Hamilton.]

Representation of the People [Money]

Queen's Recommendation having been signified—

Motion made, and Question proposed,
That, for the purposes of any Act resulting from the Representation of the People Bill, it is expedient to authorise the payment out of the Consolidated Fund of any increase attributable to the Act in the sums to be paid out of that Fund under any other enactment.—[Mr. Maples.]

Mr. Bob Cryer: I hope that the Minister can give the House an explanation. It is worth making the request, because the Bill was taken in a Second Reading Committee on 18 December. The circumstances arose apparently because of advice from Mr. Speaker's Counsel. It was found that the maximum expenditure laid down was ultra vires. I cannot recall accurately the circumstances, but the Joint Committee on Statutory Instruments discussed at least one order relating to returning officers' expenses. The legislation may result from that.
All I seek is an assurance from the Minister that the orders that the Treasury will introduce under the powers granted by the Bill, which will cover the expenditure of returning officers, will represent expenditure previously carried out under different legislation, and that there will not be reductions in the amount of expenditure granted by the Treasury to returning officers.
I mention this because there is an apparent conflict. The explanatory and financial memorandum on the Bill says:
there will, however, be no net increase in expenditure attributable to the Bill.
Yet the money resolution says that it will cover
any increase attributable to the Act in the sums to be paid out of that Fund under any other enactment.
The fund referred to is the Consolidated Fund.
I do not object to an increase in expenditure because, like all hon. Members, I think that money for returning officers is extremely well spent, especially when it has such good results as in Bradford, South where we tripled our majority. Of course, we want much better results at the next general election. We want to make sure that returning officers have adequate facilities to count the massive votes that will be cast for Labour. I should like to hear the Minister's comments.

The Economic Secretary to the Treasury (Mr. John Maples): The hon. Gentleman is right in his description of what gave rise to the Bill. It was found that under the Representation of the People Act 1983, which says that the Treasury shall prescribe maximum charges, we had difficulty in prescribing maximum charges because what: may be an appropriate maximum for one constituency is not necessarily appropriate for another. Therefore, we were faced with setting amounts that would be too low for some, or so high that they might encourage returning, officers to spend up to the prescribed amount. The regulations prescribed that in certain cases there would be specific monetary amounts and in other cases what would be recoverable would be actual and necessary costs. It was that which was found by the Speaker's Counsel to be ultra vires. We were advised that it did not fit within the power to prescribe maximum charges.
The most recent regulations use the phrase "authorised maximum" in cases where it is difficult to prescribe a


maximum. That is defined as being the amount that was spent at the 1987 election, with an uplift of 30 per cent. The problem is that that cannot continue to work past the next boundary reorganisation. It would be difficult to make it work at the next general election when the Milton Keynes constituency is to be split into two.
We had to face the problem. We have dealt with it by putting the law in the position which everyone thought that it was in before, which is that returning officers will be able to recover all expenses that were reasonably incurred, as long as those expenses are under a heading that is prescribed in the regulations. Again, where it is appropriate, the regulations will prescribe maximum payments. In that respect, the Bill will put the law back into the position that we all understood it to be in before.
The reference in the money resolution is to a slightly different problem. Sometimes expenses incurred by returning officers quite properly exceeded the maximums laid down in law. We are advised that under the 1983 Act it was possibly not legal to pay more than the amounts of money prescribed, although in some cases payments were made. Most of the payments under the original Act and under this Bill are made out of the Consolidated Fund, but when extra-statutory payments were made to reimburse returning officers for amounts over and above authorised expenses, they were paid out of voted money. It is that with which the money resolution deals; the hon. Gentleman will find that it refers to section 29(4A) of the 1983 Act.
I hope that I have answered the questions asked by the hon. Member for Bradford, South (Mr. Cryer).
Question put and agreed to.

The Press (Conduct)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. John M. Taylor.]

Ms. Clare Short: All hon. Members are aware that parts of the British press have behaved so badly in recent years that Bills supporting the right to reply and the legal right to privacy have gained great favour in the House. As a result, the Government set up the Calcutt committee, which recommended that the Press Council should be replaced by the strengthened Press Complaints Commission. Both the Calcutt report and the Government have said that, if self-regulation does not work, it should be replaced by a statutory tribunal, with statutory powers, implementing a statutory code of practice.
I should like to share with the House my experience of how these new arrangements are working. Members will be aware that Patricia Chapman, the editor of the News of the World, is a member of the new commission—[Horn. MEMBERS: "Shame."]—established, I understand, on 1 January. I want to tell the House what she has been trying to do to me.
First, I set out the background. On 12 March 1986 I introduced a Bill to remove from our newspapers pornographic pictures of women. I believe that such pictures degrade women and newspapers and set the tone for some of the most shameful and objectionable parts of our newspaper tradition. The Murdoch tabloids did not like the Bill. That resulted in a campaign of vilification against me in The Sun. Stories appeared about "Crazy Clare", "Killjoy Clare", and
20 things you ought to know about Crazy Clare",
accompanied by a succession of ugly photographs and invitations to readers to write in, freepost, to "stop crazy Clare" and to send for car stickers to "stop crazy Clare". The paper sought to portray me as an ugly harridan, a killjoy woman.
After some years the campaign fizzled out. Action then moved to the News of the World, The Sun's sister paper. The direction of the campaign changed, too. On 10 December 1990, a story appeared headlined
Labour's lovelies—Ad in Clare's paper that thrilled Grandad
—fine English, Members will agree. The story was accompanied by an extremely ugly photo of me and by two large old-fashioned pornographic photos. The story was that Tribune, a weekly Labour party paper, had carried a small advertisement suggesting that people
send for grandad's naughty pictures".
That was all. The story could have been aimed at any member of the Labour party, including its leader.
I saw the story, did not like it but knew that it was ridiculous, and did nothing. Then, on 28 October 1990, a second story appeared, with another ugly photo of course. The headline was:
Anti-porn MP's ex-aide quizzed over porn!
The article claimed that a woman who had worked for me on my "page three" Bill had been raided in connection with pornographic videos. That was a lie. The paper did not check the facts.
Instead, I received a phone call on the Saturday morning before the paper appeared, just before leaving for my constituency advice bureau. The caller was a woman who said that she was a freelance reporter who needed my


help. She said that I was her last chance. She wanted, she said, to contact someone who had worked for me and my husband and she asked if I could possibly help. I said that I was sorry but that I had not seen the person for years and had no idea where she was. The caller then said that a woman had been raided in connection with pornographic videos. I said that I knew nothing about that. She then asked what I thought about it. I said that this was getting silly, that I did not understand what she was doing, that she had asked my help but I could not give it and that I had to go to my advice bureau. I then put the phone down.
The story appeared and quoted me as saying
I haven't seen her for some time. I don't know where she is living.
It went on to say:
Then she slammed the phone down.
Note the change in my words from "haven't seen her for years" to "haven't seen her for some time", a necessary distortion of the very little that I had said, not in answer, of course, to the basic question that needed to be asked, so that an untrue story could be carried.
The woman concerned had years ago worked for a number of hon. Members. She had worked for my husband for a time before he lost his seat in the 1983 election. I was elected and I took her on to prevent her from being unemployed, but it did not work out, she left of her own volition after a short time and I have not seen or heard of her since. If the News of the World had bothered to ask, I could have told it so. It did not, because it would have ruined its false story.
I decided then—at the end of October—that this was too much. Two stories had appeared, in effect suggesting that I was a pornographer and therefore a hypocrite. The direction of the smear had changed—no longer "Killjoy Clare" but "Pornographer Clare". I decided that I should take action this time. I complained to the Press Council, I wrote to the paper, and I made an official complaint to the police.
I made the complaint to the police because the source of the story was a letter found by the police during the course of a raid, quite a proper raid—I do not know much about it but I assume that it was a proper raid—on this woman. The letter dated back to the period when she had worked for me and was completely unconnected with the criminal investigation, but some police officer had passed it to the News of the World.
I received a kind and helpful reply from Commander Richard Monk, head of the obscene publications squad at New Scotland Yard:
Although we have not met, I know of your strong support for the work we do against pornography and especially child sex abuse, and I was sorry to receive it.
He said that he had put the investigation in hand and went on:
Meanwhile I can only offer my annoyance that a newspaper has treated such a piece of irrelevant information in such an unfair way and my own keen interest to have the source of the information identified if at all possible.
I also got a small apology in the News of the World, with a less ugly photo than usual.
But now, after that, it seems that the News of the World is angry with me for complaining, and wishes to smear and belittle me further. On 10 January 1991 I got a phone call from a very good friend in Leeds. She had been contacted by a man whom I had married when I was 18, when we were both students. The marriage ended 20 years ago. John Chapman—I suggest that all hon. Members will

remember the name; I have never met this man but he is the one who goes for the grot, and I presume that if someone gets in a room with him that person is in danger of catching a disease associated with sewage—of the News of the World had been to see my ex-husband, asking about our marriage, how it had ended and what I had done afterwards. Questions had been asked with horrendous, deeply hurtful, unbelievable and completely false implications. Had he any "naughty" photographs of me? Photos of me in a nightdress were discussed. Five thousand pounds was firmly offered and the possibility of as much as £20,000 was discussed. I know the photos. They are not improper, but I would find it terrible to see them published in the News of the World.
As hon. Members may imagine, I was pretty upset by this. I was told that the story was to be run the following Sunday. I lived in horror until then. Then they suggested the next Sunday—and so it goes on. I prefer to tell my story here tonight.
I should also explain that I have been aware for some time that members or ex-members of the West Midlands serious crimes squad have been pushing a story about me to the press. I know this because a number of journalists have telephoned me to warn me. They said that it was clearly not a story but was an attempted smear. They had no intention of touching it but thought that I ought to know. I wondered what I should do about it, but decided that there was nothing that I could do and that I should rely on the decency of journalists and their code of conduct —I reckoned without Patricia Chapman, the News of the World and Mr. John Chapman.
The House may be aware that in an Adjournment debate on 25 January 1989 1 raised the case of my constituent Paul Dandy who had been charged by the serious crimes squad with a very serious offence. He had spent nearly a year in prison and in that time had attempted to commit suicide. The case against him had collapsed in court when it had been demonstrated forensically that his confession, on which the charge relied, had been fabricated: his statement to the police had been rewritten and the confession inserted. His lawyers contacted me because they were dissatisfied at the way in which his complaint against the police had been handled. They also put me in touch with other lawyers who provided evidence of similar malpractice in other cases. They all told me that such malpractice was widespread in the West Midlands serious crimes squad. I thought that I should bring such a serious matter to the attention of the House.
My speech received a good deal of coverage and later, after other cases had collapsed in court, the squad was disbanded, a major investigation is taking place into the work of the squad, and a number of other cases are being taken back to court and men who were wrongly convicted released from prison. What I said in my Adjournment debate has proved to be true, and I invite hon. Members to read the debate.
I should make it clear, because this is part of the News of the World attempted smear, that my action to deal with problems in one small unit of the West Midlands police force does not interfere with the very good relationship that I have with my local police force, which is very helpful when I approach it on behalf of constituents. In Ladywood, as elsewhere, we need the protection of our


local police. They and I have worked together on many cases and issues in order to ensure that local people are properly protected from crime.
Following my speech, various people in Birmingham, in shops and in the street, stopped me to say that they thought that I was right to say what I said. More than one said that I should be careful and to drive and go carefully in case the squad tried to get back at me. I was grateful for their concern but did not believe that such a thing would happen. I was wrong.
The story that ex-squad officers have been pushing to the press and in which the News of the World is primarily interested concerns a close friendship that I had with a man in the early 1970s when I was working in the Home Office and was positively vetted by the British security services. The man concerned was Afro-Caribbean. That may seem terrible to the News of the World and to ex-members of the serious crimes squad, but I should tell them that I grew up in Handsworth and that 40 per cent. of my constituents are Afro-Caribbean or Asian. Throughout my life large numbers of my friends have been black. I consider that to be good and a good part of my life and not a matter for a smear in the News of the World.
The man concerned lived in my house in Birmingham for some years. That may seem steamy to the News of the World, but in that house also lived two of my sisters, one of my brothers, a Chilean refugee couple, an American writer, some architecture students and others. They did not all live there at the same time. It was not that big a house, but it was a happy house and we were all good friends.
The man in whom the News of the World is interested later went to live abroad and, of course, I completely lost touch with him. In 1979 he apparently came back to Birmingham and was killed in a shooting in a car. The West Midlands police and, I now realise, the serious crimes squad investigated the murder. Officers came to see me when I was at work as the director of Youthaid in 1979. I told them all that I knew, and that was the end of it. They also called on everyone who knew him. One of my brothers whom they also went to see said that the police commented on the large number of nice friends that he had.
Many people can testify to this man's character at that time. He was known and liked by many good people. The News of the World has suggested in a letter to my solicitor that this man had some very serious previous convictions. I do not know whether that is true. I am tempted to say that, coming from the News of the World, it probably is not, but perhaps it is. I assume that everyone can now see the sort of story that the News of the World plans to write and the new direction of the smear that it wishes to throw at me. I can only say that neither I nor any of that man's other friends was aware of such convictions or know the reasons for his death. He is not alive to answer for himself, and I understand that the person who killed him has never been found.
My husband of 25 years ago was at first intrigued by the News of the World approach and played it along a little. He was kind enough afterwards to contact me and give me a full account of everything that was said. I know that my ex-husband now feels deeply aggrieved by what took place. He believes that the conversation was tape recorded, although he insisted that it be confidential. He now

understands that the News of the World was using him to get at me. He feels aggrieved that his privacy was so seriously invaded because, in order to use him to get at me, the newspaper had quite improperly gone through all sorts of private details of his life.
My solicitor has complained to the News of the World about the offer of money for photographs and about some of the newspaper's most awful questions. The News of the World has denied both matters. I have to say, "They would, wouldn't they?" It is quite impossible for any reasonable person who hears the whole story to believe the News of the World denial, but the editor of the News of the World has to pretend, because of her place on the Press Complaints Commission, that the paper did not do such things.
I should like to mention one other matter about my life. I do not want to talk in the House about my personal life, but as the News of the World appears to be planning to print a distorted account of my whole life, I prefer to tell the House the truth.
Many Members of this House remember with affection my husband Alex Lyon. They often send good wishes to him through me. Some hon. Members know that he is terribly ill and that I am doing my best to look after him as well as do my job as a Member of Parliament. I think, although I cannot be certain because he cannot explain things clearly to me, that the News of the World has been to see him. He kept talking about some man who had called. I suspect, but I may be wrong, that it was the News of the World.
I must ask the News of the World not to seek to smear and belittle me. I also ask, as strongly as I can, that it does not seek to belittle my husband—it would not be difficult to do so in view of the condition that he is in. It would be deeply unfair and wrong to use him and his illness to get at me.
It appears that the News of the World has crawled over the whole of my adult life. I left home when I was 17 to go to university. I met and married my philosophy student husband. In the early 1970s I worked in the Home Office —that is the period in which the News of the World is most interested—and in the late 1970s I became involved with and married Alex Lyon. That brings the News of the World completely up to date.
The question is, why is the News of the World so interested in me? Why has it spent so much time trailing through my life? The answer is not just that it wants to smear and belittle me for the titillation of their readers; the real answer is political. Two motives come together—disgruntled ex-officers of the West Midlands serious crimes squad want to get at me, and the Murdoch tabloids hate me because I have said that they should not carry porn in their papers.
For those to whom this has not yet happened, I should like to warn hon. Members and the public that to have one's life crawled over by the News of the World is an extremely unpleasant experience. For the past two weeks I have been haunted by the Gulf and by the News of the World—the sublime to the ridiculous. I do not think that I should be distracted from my work in this House by that newspaper's squalid activities.
I wish to warn every Member of this House of the serious implications. If any one of them steps outside the political space allowed to them by the tabloid press, it can do it to them. It is a very serious matter, and I think that the Privileges Committee should consider it. After all, I am


not the only one. The hon. Member for Clwyd, North-West (Sir A. Meyer) dared to stand against the former Prime Minister, and it did it to him. The hon. Member for Northampton, North (Mr. Marlow) dared to say that it was time for the former Prime Minister to retire, and it did it to him. The hon. Members for Hampshire, East (Mr. Mates), for Chichester (Mr. Nelson) and for Leeds, North-West (Dr. Hampson) dared to support the right hon. Member for Henley (Mr. Heseltine) in the Tory leadership battle, and it did it to them. There are probably others, but I do not read those newspapers.
Every Member of Parliament can be done over. Please do not think that one can escape because there is nothing to hide in one's life. Those newspapers can make the events of any ordinary life like mine seem sordid and squalid. It is a question of privacy, but it is also a very serious question of politics and democracy that should concern us all.
My conclusions—and I am sorry that I have taken so long—are that, first, hon. Members must take the issue seriously. It is me today, it will be one of them tomorrow. It involves the misuse of press power to prevent us from properly doing our job as Members of Parliament. Secondly, I say to my fellow citizens in the country, please do not think that this is a matter just for Members of Parliament; the newspapers can do it to anybody. If, for any reason, a member of a family comes to public attention, they will crawl over his or her life, distort the truth and hurt that person—who will not have the platform that I have to answer back. As we know, the newspapers are currently abusing even the families of people who have been lost in the Gulf.
Thirdly, I call for legislation as a remedy. My solicitor and I would like to say how enormously grateful I am to him for his help through this time—tells me that I could apply for an injunction to stop the News of the World, or sue it for defamation afterwards. I am better off than most of my fellow citizens, but I cannot possibly afford an injunction. I am not interested in money after I have been smeared and belittled. As long as I can pay my bills at the end of the week and care for those whom I have to care for, I am not interested in money. We need proper, cheap, efficient remedies to prevent what has happened. I note that the preventative hotline recommended by the Calcutt report has not yet been set up—otherwise I would have used it—and the Library tells me that that is now unlikely.
Lastly, and extremely importantly, I call for the sacking of the editor of the News of the World from the Press Complaints Commission. We cannot take self-regulation seriously for a minute when a person who organises events such as those that I have described is supposed to help to curb the excesses of the press.
I intend to ask the Privileges Committee to consider my case as I am being attacked for doing two things I did in this House as part of my life as a Member of Parliament. I shall complain also to the Press Complaints Commission and to the chief constable of the west midlands. I hope that he will be as helpful as Commander Monk. It is, after all, the same thing—the misuse by some police officers and the News of the World of irrelevant information obtained during a criminal investigation.
A healthy democracy needs a healthy press, and we do not have that in Britain. I believe that we should get on and legislate to improve the standards of our press.

The Parliamentary Under-Secretary of State for the Home Department (Mr. Peter Lloyd): Having listened carefully to the hon. Member for Birmingham, Ladywood (Ms. Short), I can fully understand her feelings about the inquiries which she has reason to believe a Sunday newspaper and other journals—I believe that she referred to other sections of the press—are making about her personal life and relationships going back many years. Judging by what she says she has been told about the questions and the assumptions, and the assertions that lie behind them, I can readily understand why she is distressed and angered. I understand her reaction to the other unfriendly and inaccurate press coverage as she described it.
As the hon. Member for Ladywood mentioned, hon. Members on both sides of the House have been and remain concerned about journalistic abuses, especially invasions of privacy that cannot be justified in the public interest. The hon. Lady commented that a couple of years ago several private Members' Bills that would have given a right of privacy or a right of reply were introduced in response to cruel and irresponsible journalism that had caused widespread dismay in this place and among the general public. The Government were unable to support the Bills for reasons of principle and because of technical flaws. However, we announced on 21 April 1989 the setting up of a committee to consider the case for a new remedy for unwanted intrusions into privacy by the press.
The report of that committee, under the chairmanship of Mr. David Calcutt, was welcomed by hon. Members on both sides of the House on 21 June 1990. We accepted its main recommendations, which were for the replacement of the Press Council by a Press Complaints Commission, for new offences of unwarranted invasion of privacy for publication purposes and for slightly stricter court reporting restrictions. At the same time, and consistent with the Calcutt committee's approach, we made it clear that self-regulation under a new Press Complaints Commission was the industry's last chance to put its house in order, and that we would review the effectiveness of the commission after 18 months' operation to ascertain whether it should be put on a statutory footing.
We are naturally pleased that the industry set up the Press Complaints Commission at the beginning of the year, and did so with considerable dispatch. The previous Home Secretary welcomed the appointment of Lord McGregor of Durris as its chairman for his mixture of independence of view and experience as chairman of the last Royal Commission on the press, and more recently of the Advertising Standards Authority.
However, the composition of the commission—something to which the hon. Member for Ladywood referred particularly—its remit and its adjudicatory code are not matters for the Government at this stage, and we would not wish to influence them. We have made it clear that we are concerned only with the effectiveness of the new arrangements in terms of making abuses things of the past. We are not concerned with the detail of those arrangements. It is for the commission to decide how best to regulate the industry, but it is clear to me that the issues to which the hon. Lady referred are matters for the commission. I am not so certain that any of the activities that she described would be caught by the offences of physical intrusion recommended by the Calcutt committee


and accepted in principle by the Government, but they may be. I shall have to read the hon. Lady's remarks carefully.
The commission is proposing to adjudicate according to a code that will be modelled on, but not identical to, that proposed by the Calcutt committee. The code includes matters such as inaccuracy, to which the hon. Member for Ladywood referred, confusion of fact and comment, to which again she referred, opportunity to reply and, pre-eminently, intrusion into privacy. I suggest that the hon. Lady should do what she said she was intending to do, although she was sorry that she did not have the hot-line to do it, and ask the commission to intercede in the matters that she has outlined before publication. If the

article is published, I suggest that she should consider whether to make a formal complaint on the ground that the code has been breached. Alternatively, I suggest that she takes both actions. For my part, I shall ensure that the official record of the debate is sent to the chairman of the Press Complaints Commission. In that way, the commission will have, at the earliest opportunity, the full catalogue of intrusion, innuendo and distortion to which the hon. Lady is convinced that she is being subjected and which, as I say, I can well understand she finds deeply hurtful.
I shall consider carefully the references that the hon. Lady has made to the police, as well as all the other important and worrying points that she made during her speech.
Question put and agreed to.
Adjourned accordingly at half-past Eleven o'clock.